eBusiness Weekly
Enacy Mapakame
Tanganda Tea Company Limited’s bulk tea exports rose 14 percent to 3 747 tonnes for the half year to March 31, 2022 compared to the same period in the prior year.
This comes as the export average selling price firmed up slightly to US$1,43 per kilogramme from prior year average selling price of US$1,41 per kilogramme.
But total bulk tea production for the period went down 12 percent to 5 935 tonnes from prior year production of level of 6 762 tonnes due to dry weather in December of 2021 and February 2022.
Coffee exports of 96 tonnes were 14 percent above 84 tonnes achieved in prior year. Average export selling price of US$6,67 per kilogramme remained slightly firmer than US$6,50 realised prior year.
The company is realising the benefit of its diversified operations.
Tanganda revealed that avocado and macadamia harvest commenced in earnest at the end of the reporting period and the revenue is recorded in the second half of the financial year.
Yields of avocado and macadamia are expected to increase with enhanced maturity profiling of plantations over the next three to five years.
The Covid-19 pandemic and global conflict in Ukraine created global logistical and supply challenges, but packed tea sales volumes were resilient at 933 tonnes, which was 4 percent below 1 033 tonnes in prior year.
In terms of financial performance, the business remained resilient despite the adverse impacts of dry weather in December 2021 and February 2022, pandemic and global conflict headwinds.
Total revenue fell 7 percent to $1,909 billion compared to $2,061 billion achieved same period of the previous year.
According to the group, timing of revenue recognition from export of macadamia nuts has resulted in the seeming decline in revenue.
“The macadamia export market is gravitating towards kernel instead of the traditional nut in shell and the revenue from these exports will be recognised in the second half of the financial year,” said chairman Herbert Nkala in an update for the half year period.
Profit before tax for the period amounted to $589 million compared to $749 million achieved prior year. Profitability was adversely affected by the disparities between increase in production costs and movement in exchange rate.
The exchange rate depreciated by 69 percent during the period under review versus year on year inflation of 73 percent. Operating profit declined 45 percent to $612 million. Profit for the period went down 46 percent to $348 million compared to $647 million recorded during the same period last year.
Total assets increased 8 percent to $8,8 billion from $8,1 billion.
Despite the challenging environment, the group expects improved performances from its various investments. For instance, the solar plants constructed at three of the five estates have significantly reduced reliance on power from the national grid.
“Further benefits from the investment are expected to be fully realised once full reticulation and net metering have been implemented before the end of 2022,” said Nkala.
Tanganda has also invested in new machinery at the packaging factory in Mutare in line with its value addition strategy and factory conversion efficiencies. The investment is expected to grow volumes in the regional market.
