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Tanganda Tea register 42% revenue growth, record loss

Tanganda Tea Company Limited issued its audited financial statements for the year ended 30 September 2023.

Revenue grew by 42% for the year to ZWL128.99 billion from the prior year of ZWL90.77 billion in inflation adjusted terms. In historical cost terms, the company recorded a 678% growth from ZWL7.35 billion to ZWL57.24 billion.

Turning to profitability, the company reported an inflation-adjusted loss after tax of ZWL17.05 billion compared with a profit after tax of ZWL4.33 billion in the previous year. In historical cost terms, the profit after tax of ZWL15.45 billion grew by 270% over ZWL4.17 billion in the previous year.

Agriculture operations recorded mixed performances with Macadamia and coffee recording volumes growth while bulk tea, avocado and beverages recorded declines.

The company sold 1 551 tonnes of macadamia (nut-in-shell) compared to 621 tonnes sold in the prior year. The unsold balance of 350 tonnes from the preceding year’s stocks was exported during the financial year.

Market preference shift from nut-in-shell to kernel impacted prices as they declined 41% to USD1.93 from USD3.26 per kg realized to September 2022.

The company will pursue value addition options to guard against price fluctuations on primary produce.

Coffee production of 87 tonnes was 28% above the 68 tonnes achieved in the prior season. The current year’s crop will be sold in the ensuing financial year.

Bulk tea was affected by the late onset of the rain season and its relatively uneven distribution. Volume tumbled from last year tonnage of 8 670 tonnes produced to 7 894 tonnes this year. As 9% decline was recorded.

Export of bulk tea fell by 12%. However, prices were firm at USD1.44 per kg from the prior season’s average selling price of USD1.42 per kg.

The company reported a 50% decline in avocado exports. Exports were 2 148 tonnes were compared to 4 321 tonnes in the prior year.

The average export price remained at 44 US cents per kg, as achieved in the prior year. Forty-four additional hectares of avocado plantation were established during the financial year, bringing the total hectarage under avocado to 541 hectares.

A decline was recorded in the beverages segment during the year. Packed tea sales volumes declined by 6% from 1 994 tonnes achieved in the prior year to 1 873 tonnes sold in 2023.

The company attributed the decline to logistical global challenges in sourcing inputs.

Plans are in place to clear unfulfilled orders, which will see volumes of the brands growing going into 2024.

The company continue to Take a lead in responding to customer needs. The company continues supplying herbal infusions to support our customers’ expressed demand.

They gave instituted research with the desire to come up with new flavored herbal products.

Foreign currency sales increased from 2% in prior year to 70% this year.

To hedge against local currency inflationary pressures and devaluation, the percentage of domestic sales made in United States Dollars has been pushed up to 70% from less than 2% in the previous year.

On sustainable business priorities, the Company reiterated its committed to its sustainability agenda with increased activities in environmental stewardship, optimal resource utilization, out-grower scheme oversight, and community involvement.

The company values quality management systems and is accreded to various certifications that demand attention to sustainable business practices.

The outlook looks brighter for the company.

The predicted El Nino is not expected to significantly impact avocado and macadamia yields as the Company is invested in dams, reservoirs, and high-technology precision irrigation to mitigate the impact of a drought.

Yields of avocado and macadamia are expected to increase with enhanced maturity profiling of plantations over the next three to five years.

The demand for its products remains relatively strong despite the impact of complex macro-economic factors on the local and regional markets

The company is pursuing a growth strategy which will see it diversifying in the regional market further.

Given the low performance of macadamia and avocado crops during the financial year the company opted not to declare a dividend.

Bruce Hendrik Henderson joined the company board as an independent non-executive director of the Company with effect 1 June 2023.

The company turns 100 this year and celebration preparations are underway.

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