eBusiness Weekly
Business Writer
Tanganda Tea Company’s half-year revenue jumped 70 percent to $10.97 billion compared to $6.46 billion prior year despite reduced sales and production volumes.
The company remains the largest producer, packer and distributor of tea in Zimbabwe and has developed the largest harvest of both macadamia nuts and avocado, becoming the single largest producer of both high-value crops in Zimbabwe.
During the half-year period to March 31, 2023, profit after tax also increased by 24 percent to $1.47 billion from a profit of $1.18 billion in the comparable period.
Group chairman, Mr Herbert Nkala, said bulk tea production of 5 582 tonnes, despite the late onset of the rainy season, exhibited noteworthy endurance, being 6 percent lower than prior year’s production of 5 935 tonnes.
He said bulk tea exports of 3 415 tonnes, 9 percent below 3 747 tonnes, followed the season’s production trend.
“The export average selling price firmed slightly to US$1.45 per kg from the prior year average selling price of US$1.43 per kg,” he said in a statement of the financials.
Mr Nkala said the avocado and macadamia harvest commenced in earnest at the end of the reporting period.
In the beverage division, Mr Nkala said despite the liquidity challenges and waning consumer demand affected by reduced disposable income on the local market, packed tea sales volumes of 929 tonnes remained resilient, 7 percent below the 993 tonnes achieved in the prior year.
“The economic and operating environment is expected to remain difficult against the backdrop of continued exchange rate volatility and the resultant inflationary pressures.
“The company is optimistic that it has put in place the necessary mitigation strategies to navigate the difficult terrain during the remaining part of the financial year,” he said.
FBC Securities Research said in its earnings review that while production volumes came under pressure in the first half due to the late onset of the rainy season, improved weather conditions for the rest of the year are likely to support volume growth moving forward.
“The business registered considerable growth in export sales over the period under review. As the effects of the Covid-19 strain decimate and disturbances from the Russia-Ukraine war cool off, we anticipate a sustained enabling environment for the company’s export business,” the firm said.
FBC noted that while the company share price previously underperformed in comparison to the ZSE All Share Index and parallel market rate movements, that position has largely reversed and the counter presents value preservation characteristics in the current inflationary environment.
Tanganda, in 2022, made investments in solar power plants, which saw renewable energy use steadily grow to 20,55 percent of the total energy used during the year.
In a bid to reduce dependency on both thermal and hydropower from ZETDC, which over the years has been erratic and costly, Tanganda adopted a strategy to invest in solar power plants, which would also reduce the usage of diesel generators.
During the year 2022, the company’s solar energy production reached 1,9 kwh, an improvement from 271 043 kwh in 2021.
Consequently, power supplied by ZETDC declined by 29,19 percent to 6,68 kWh from 9,44 kWh in 2021, while generator power increased by 8,5 percent to 801,200 kWh from 398 618 kWh in 2021, attributed mainly to periods of bad weather.
The company constructed and completed the installation of a 1,8 MW solar plant at Ratelshoek estate, a 1,2 MW solar plant at Tingamira estate and a 1,4 MW solar plant at Jersey estate.
