Tanganda suffers ZWL$17bn loss

 

BUSINESS REPORTER

 

Tanganda Tea Company incurred a ZWL$17bn loss in the 12 months to September 30, 2023, after achieving a  ZWL$4.33bn profit  in the previous year, due  to significant economic headwinds, Business Times can report.

The board chairman, Herbert Nkala, reported that the company was confronted with a number of headwinds, such as volatile exchange rates that increased inflationary pressures and resulted in high production costs in addition to frequent power outages.

“The company suffered an inflation-adjusted loss after tax of ZWL$17.05bn compared with a profit after tax of ZWL$4.33bn in the previous year,” Nkala said.

Despite this, revenue for Tanganda grew  42% to ZWL$128.99bn in the period under review from ZWL$90.77bn in 2022.

He said the late onset of the rain and its relatively uneven distribution led to a decline in bulk tea production.

According to Nkala, the volumes generated decreased by 9% to 7 894 tons from 8 670 tonnes the previous season.

Additionally, bulk tea shipments decreased by 12% to 6 238 tonnes from 7 125 tonnes recorded the year before.

The export average selling price increased slightly to US$1.44 per kg from the prior season’s average selling price of US$1.42 per kg.

Also avocado exports of 2 148 tonnes were 50% below the prior year of 4 321 tonnes  due to the biennial bearing phenomenon coupled with the impact of the extensive pruning carried out on 55 hectares of mature trees to rejuvenate them.

The average export price remained at US$0.44 cents per kg, as achieved in the prior year.

At least 44 additional hectares of avocado plantation were established during the financial year, bringing the total hectarage under avocado to 541 hectares, according to Nkala.

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

Nkala said 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.

He said the decline in packed tea sales volumes of 6% from 1 994 tonnes achieved in the prior year to 1 873 tonnes sold in this financial year was mainly due to logistical global challenges in sourcing inputs.

“Plans are in place to clear unfulfilled orders, which will see volumes of the company’s brands growing as Tanganda goes into the coming year.

“In response to discernable consumer appetites for healthy lifestyles, the company continues supplying herbal infusions to support our customers’ expressed demand. Research is ongoing to broaden this range of products by bringing in flavoured herbal infusions,” Nkala said.

The company plans to invest in value addition options to mitigate primary produce price fluctuations and to diversify markets into Europe and America.

“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,” he said.

Nkala said notwithstanding the operating environment challenges, the company remains focused on its value-addition prospects and cost management strategy.

The board has recommended not to declare a dividend following the depressed performance of macadamia and avocado crops during the financial year.

 

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