eBusiness Weekly
Kudakwashe Mhundwa
A $2,7 million export incentive from the Reserve Bank of Zimbabwe in addition to other operating income helped listed agro-concern Ariston Holding report a profit after tax of $2,4 million for the year-ended September 30, 2018.
The incentive compares favourably with the $802,935 received prior year comparative.
Without accounting for the export incentive amount, which management said constitutes the bulk of the revenue line, the company would have reported a loss for the period under review.
This is despite reporting a 28 percent growth in revenue to $14,1 million from $11 million recorded in the previous year.
This was on the back of improved average selling prices and improvements in fruit quality in the trading year.
In terms of profits, gross margin increased to 36 percent from 31 percent in 2017 while nominal gross profit amounted to $5 million from $3,3 million prior year comparative.
Ariston narrowed operating expenses by 5 percent to $4 million, a result which management say was achieved by cost cutting measures that were introduced by the group.
Finance costs were also reduced significantly to $1 million from $1,8 million prior year.
On financial performance from the group`s business units, Southdown Estates retained its position as the group’s major contributor on both revenue and profitability.
However, its revenue contribution declined to 80 percent from 82 percent in the prior year.
“Southdown Estates (comprising of Southdown, Clearwater, Roscommon and Blended Tea Factory) continued to be the Group’s dominant contributor to both revenue and profitability.
In the current year Southdown Estates’ contribution to overall revenue declined from 82 percent in prior year to 80 percent, which is attributable to improved contribution to Group revenue by Claremont Estate and Kent Estate,” chairman Alexandra Jongwe said.
Tea production improved by 35 percent to 3 285 tonnes average selling price also increased from $1,17/kg on prior year to $1,82/kg. Macadamia production experienced little change from 1 272 tonnes to 1 266 tonnes in the period under review while average selling price for the nuts increased 18 percent on prior year.
Jongwe said revenue for the fruit category comprising of stone fruit, pome fruit, banana and avocado grew by 64 percent during the period under review.
“The increase was driven by improved average selling prices due to overall improvements in quality and fruit size coupled with modest increases in production volumes for all products,” he said.
He highlighted that the group will invest heavily in growth and capital expenditures.
“The 2019 agricultural season has commenced on a good note. The group’s financial position continues to improve. The majority of our crops are destined for the export market, and as long as the group continues to focus on quality and maintaining its international accreditation, the strides made in 2018 will be improved upon.
“Early indications on export pricing are showing that the prices will remain firm. The group is still investing heavily in enhancing its future growth and performance by making substantial capital expenditure and repairs and maintenance,” said Mr Jongwe.
The group did not declare any dividend.
