Zimbabwe Stock Exchange-listed TSL Limited has announced a strong set of results for the year to October 31, 2018 with revenues rising 19 percent to $52,1 million.
The group says it was buoyed by an improved performance in the country’s tobacco sector during the period under review. Last year, Zimbabwe tobacco output hit an all-time high of 237,1 million kilograms.
“The group produced a positive set of results for the year ended 31 October 2018. The agricultural cluster performed strongly. Tobacco-related business from the growth in the tobacco volume.
“The agro-inputs business had a good year, given the 2017/18 rainfall season and its early procurement of product to ensure better viability. These factors resulted in market
Operating profit for the year rose 30 percent to $9,1 million.
Last year, TSL disposed of its entire 16,53 percent stake in Nampak Zimbabwe Limited which had been designated as available for sale since October 2014.
A non-operating profit on disposal of $7,7 million was achieved while a special dividend of $4,8 million was distributed to shareholders.
Net asset value per share increased 5 percent to 24,3 cents while current ratio improved to 1.8 from 1.4 buoyed by funds from the disposal of the investment in Nampak.
Gearing marginally reduced to 13 percent from 14 percent as the group continues to control its financial commitments.
Tobacco Sales Floor (TSF) maintained its market dominance in the auctioning of independent crop.
Propak Hessian recorded volume growth of 36 percent above prior year on the back of larger national tobacco crop size and an increase in its market share.
Subsidiary, Agricura reported growth in both sales and customer base expansion on timely product procurement and availability. During the period, the group introduced an Agricura branded fertilizer which has been accepted by the market.
TSL’s farming operations also had a good year as tobacco crop fetched better prices. However, commercial and seed maize yields were down given pressures and the dry spell in January.
The group’s logistics business had an improved performance in the year under review on improved tobacco volumes handled by for existing merchants which also increased. Cargo volumes were considerably up on prior year as the company introduced value added services particularly for fertilizer importers.
Vehicle rental business – Avis- also recorded growth especially in the first half of the year and the unit remains profitable and generates foreign currency.
As part of its five-year strategy, TSL is looking at improving efficiencies in the agriculture supply chains in the country.
Management say they have allocated $10 million for capital projects to be undertaken in the 2019 financial year.
The TSL board has declared a dividend of 0,7 cents a share.
ANALYSTS’ COMMENTS
In the outlook, the group’s renewed purpose is to “move agriculture” and bring significant efficiencies to Zimbabwean agricultural supply chains. Management has indicated that the group will be investing in people, upgrading infrastructure and market presence, developing technology platforms and leveraging local and international partnerships. We like the group’s exposure in the tobacco, which is a strategic foreign currency generation sector. TSF has retained its dominant position in the auction of independent crop with a market share of over 60%. The stock is trading in line with our universe of comparable agricultural and tobacco stocks. (Akribos Research Services)