Ariston Holdings eyes stronger second-half

SAMANTHA MADE

Diversified agricultural concern Ariston Holdings Limited is optimistic about achieving stronger sales performance in the second half of the year, even as it navigates a persistently challenging operating environment, Business Times has learned.

Chairman Alexander Crise Jongwe said the Group remains focused on controlling costs while intensifying its revenue-generation efforts to offset pressures from the first half, which was largely characterised by production-related expenditure.

“The first half of the year is mainly characterised by incurring production costs, while the majority of selling activities occur in the second half. The Group is looking forward to an improved selling season for the current year,” Jongwe said in a statement accompanying the company’s half-year financial results.

Jongwe noted that the tea production season commenced on a relatively positive note, although harvests were marginally lower than those recorded during the same period last year.

“The tea production season commenced well with harvests being slightly lower than those harvested in the prior comparative period,” he said.

In addition to tea, the company is also anticipating a solid output from its maize operations.

“The Group expects a harvest of more than 300 hectares from the maize crop planted at Kent,” Jongwe said.

However, financial performance during the first half of the year was weighed down by reduced volumes in local tea sales. Ariston posted revenue of US$1,991,087, a decline of 18% compared to the same period in the previous year.

“Revenue of US$1,991,087 generated during the first half of the year was 18% below the prior comparative period. This was mainly attributable to a decline in local tea sales volumes,” Jongwe stated.

While revenue declined, the company managed to improve production efficiency. Ariston recorded a 24% improvement in cost of production, helping to cushion some of the impact, although the Group still posted a gross loss of US$441,078 for the period.

“The decline in revenue posted, countered by a 24% improvement in the cost of production, resulted in the Group posting a gross loss during the period of US$441,078,” Jongwe explained.

In terms of foreign exchange effects, Jongwe recalled that the prior comparative period had been negatively affected by significant and largely non-cash exchange losses, mostly stemming from US dollar-denominated liabilities. However, the company has since benefitted from a shift in currency dynamics.

“Since the change in functional currency, exchange gains have been generated arising from Zimbabwe dollar denominated liabilities. These improved by 78% from the prior comparative period,” Jongwe said.

Ariston also saw relief on the financing front, with finance costs declining by 25% compared to the same period last year.

“Finance cost declined by 25%, compared to the prior comparative period. As a result of all the above, the Group posted a 32% decline in the loss incurred during the first half of the year,” Jongwe said.

Looking ahead, the company’s strategic emphasis on balancing cost containment with revenue acceleration is expected to support its performance in the second half of the year. Management remains cautiously confident, bolstered by the expectation of improved seasonal sales and a better mix of product output.

Despite the macroeconomi