Listed agro-industrial concern, Ariston Holdings, swung to a profit of ZWL$28.3m in the six months to March 31, 2021, from a loss of ZWL$235.01m incurred in the prior comparative period underpinned by good agricultural season which resulted in improved crop yields.
Revenue for the group rose 64% to ZWL$425.5m in the period under review from ZWL$259m reported in the prior comparative period due to increase in sales of local products.
In a statement accompanying the results, Ariston chairman Alexander Jongwe said the cost of sales decreased by 37% and was significantly behind revenue growth and reflects the impact of cost containment activities which resulted in gross margin improvement to 63% compared from 34% reported in the prior comparative period.
“The 2020/21 agricultural season commenced on a very good note. The weather conditions during the period under review resulted in a significant improvement on previous periods,” Jongwe said.
Jongwe said interest expense grew by 66% to ZWL$12m in the reviewed period and the increase was driven mainly by the interest rate on local borrowings.
The group, Jongwe, said was in the process of reducing local borrowings. Tea production volumes improved on the back of good weather conditions.
Production stood at 2 023 tonnes in the reviewed period, which was 8% ahead of prior year’s 1 870 tonnes.
Export tea sales volumes improved by 10% to 656 tonnes while current period pricing declined by 2%. Local tea sales volumes improved by 73% while pricing increased by 39%.
At the end of March, 32% of the projected annual macadamia crop had been produced compared to 37% in the prior period.
In volume terms the production for the current half year was 419 tonnes, of which 215 tonnes had been sold.
For the same period in prior year, 389 tonnes had been produced, of which 178 tonnes had been sold.
Pricing reflected an 11% decline against the same period in prior year. Therefore, the current year yield for the macadamia crop is expected to be 18% ahead of prior year, he said.
The fruit category’s production volumes of 2 288 tonnes for the current half year improved by 12% when compared with the prior comparative period.
This category comprises stone fruit and pome fruit. Both fruits registered growth of 17% and 5% respectively as yields continue to improve.
Jongwe said the selling period for stone fruit coincided with the lockdown promulgated by the government in January 2021 and this had an adverse effect on fruit uptake in the market.
Most of the export markets were also depressed due to Covid-19 lockdowns implemented in various countries.
As a result stone fruit sales volume suffered a 14% decline compared to the prior comparative period. Pome fruit was unaffected.
The category registered a 6% improvement in the average selling price when compared with the prior comparative period.
Other products making up 17% of revenue comprise potatoes, soya beans, seed maize, commercial maize, seed sugar beans, avocado, bananas and poultry.
These have been growing progressively over the years and continue to contribute positively to the group’s profitability.
Ariston expects improved yields for all crops due to a good 2020/2021 agricultural season.
The majority of the harvesting and selling period occurs in the second half of the year due to the cyclical nature of the group’s activities.
Export macadamia demand is projected to remain firm however a slight decline in the average selling price for the year is expected. Export tea demand and pricing are anticipated to remain softer than in the prior year.
Overall, the group is expecting an improved financial performance to the end of this financial period.