TSL expedites infrastructure rollout

LIVINGSTONE MARUFU

Tobacco Sales Limited (TSL), a publicly traded agribusiness firm, is expediting the completion of all its infrastructure projects within the next twelve months as it intensifies efforts to unlock higher revenues from its fast-growing property portfolio, Business Times can report.

TSL says the accelerated completion of another complex, the development of residential stands and the refurbishment of existing Agricura branches will significantly boost the group’s topline amid firm demand for both commercial and residential space.

Board chairman Antony Mandiwanza said demand for space remains robust, necessitating the fast-tracking of ongoing infrastructure developments across the group.

“During the fourth quarter of 2025, the group resumed construction of a modern 8 000 square metre warehouse at the Hubert Fox Complex in Harare. The facility, which is already tenanted, is expected to be completed in the ensuing financial year,” Mandiwanza said.

As part of the accelerated rollout, TSL will commence development of its 73-hectare land bank in Harare South in the second quarter of the 2026 financial year.

“Upon completion, the project is expected to deliver approximately 1 900 residential stands, together with commercial stands and other community amenities. In support of service excellence to our customers, the group commenced the refurbishment and modernisation of Agricura branches during the year, with the programme expected to be rolled out across all branches nationwide in the following year.

“TSL is well positioned and prepared to leverage projected growth in the tobacco crop, underpinned by investments in process optimisation and warehouse space expansion,” he said.

Mandiwanza noted that while demand for infrastructure development remains firm, progress continues to be constrained by limited access to long-term financing and rising construction costs, driven by regional shortages of construction materials and price escalations.

He said relative stability in foreign exchange rates has been supported by tight monetary policy measures implemented by authorities and improved foreign currency generation.

This improvement, he added, was largely underpinned by a recovery in the agricultural sector following the El Niño-induced drought experienced in the previous year, increased diaspora remittances, a thriving mining sector buoyed by higher gold production volumes and record gold prices, as well as improved power generation.

“Notwithstanding this, the operating environment continues to be characterised by elevated government debt, inflationary pressures and constrained market liquidity,” Mandiwanza said.

The tobacco industry recorded a historic season, with deliveries rising to 355 million kilogrammes from 232 million kilogrammes in the prior season, representing a year-on-year increase of approximately 53%.

Against this backdrop, TSL revenue from continuing operations rose 24% to US$45.6 million, mainly driven by improved volumes across all business units following a successful 2024/2025 summer cropping season.

Earnings before interest, tax, depreciation and amortisation surged 70% to US$19.3 million, while profit for the year from continuing operations jumped 85% to US$10.5 million from the comparative period.

Overall profit for the year increased to US$10.88 million from US$3.62 million recorded in the prior year.

“The improvement in profitability compared to the prior year was driven by higher revenue, largely attributable to increased volumes, and ongoing cost optimisation initiatives. The growth in profitability was also complemented by fair value gains on the investment property portfolio and gains on disposal of properties and equipment.

“The group’s financial position strengthened during the year, with total assets increasing by 11% to US$99.4 million,” Mandiwanza said.

The gearing ratio improved from 18% to 13%, while shareholders’ equity rose 11% to US$68.4 million. The group also generated positive operating cash flows, with cash reserves increasing fivefold to US$8.6 million.

The board declared a dividend in respect of the foregone dividend at the end of the financial year, together with the net proceeds arising from the disposal of two properties during the year.