Ariston expects a better second half

22 Jun, 2022 - 00:06 0 Views
Ariston expects a better second half

eBusiness Weekly

Business Writer
Ariston is expecting higher yields, a softening in the export price of macadamia nuts but improvement in
export tea price in the second half of the year.

Commenting on the company’s outlook Ariston’s Chairman Alexander Jongwe said, “The group’s
activities are cyclical in nature with the majority of harvesting and selling operations occurring in the
second half of the year.

He however said, to date, indications are that the group will have higher yields than prior year.
Jongwe also spoke about developments in the global economy where he said, the continued effect of
the COVID-19 pandemic on global supply chain coupled with the effect of the war between Russia and
Ukraine will have a negative impact on the speed and cost of logistics resulting in increased input costs.
“So far, the Group has noted the significant increase in cost of fertiliser which is the Group’s most
significant single cost,” said Jongwe.

Meanwhile presenting the group’s financial performance for the half year to March 31, 2022 Jongwe
said Covid-19 disruptions affected exports leading to a drop of 22 percent in tea export volumes.

“Export tea sales volumes suffered a 22 percent decline to 511 tonnes, while average selling price
improved by 8 percent compared to the prior period. There was a slow uptake of export teas in the first
quarter of the year due to the effects of the COVID-19 pandemic on shipping logistics and costs,” he

The decline will choke the company’s foreign currency revenue generation capacity. Most companies in
the country are currently taking advantage of exports to beef up their US$ earnings.

However, recent declines in Covid-19 infections the world over which has seen most countries beginning
to open up their markets to imports from other countries is likely to improve the company’s exports.
During the period, local tea sales volumes declined by 10 percent to 735 tonnes whilst the local tea
average selling price increased by 21 percent.

For macadamia, 36 percent of the projected annual crop had been produced as at end of current half-
year, compared to 32 percent in prior period. As at half year, macadamia production volumes were 4
percent above the prior comparative period.

Overall, export sales volumes were 47 percent ahead of the prior comparative period due to sale of
some prior year macadamia stocks at the start of the current year.

This resulted in the reflected sales volume increase compared to prior comparative period. Pricing
reflected a 16 percent decline against the same period in prior comparative period. The macadamia
kernel prices have not changed much.

“However, the macadamia nut-in-shell prices have been under pressure due to the effects of COVID-19
induced lockdowns in China. This could be a temporary feature which may reverse once China is back to
full production, however until then, we have witnessed a contraction in macadamia nut shell prices,”
Jongwe added.

Other products comprise potatoes, soya beans, seed maize, commercial maize, seed sugar beans,
avocado, bananas and poultry. These contributed 27 percent of revenue compared to 17 percent in
prior period showing that this category continues to grow and contribute positively to the group’s

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