By Alois Vinga
LISTED tea processor, Tanganda Tea Company has defied the economic headwinds obtaining in the economy to record a whopping ZW$15, 4 billion in profits.
Presenting the group’s financial performance for the year ended September 30 2023, Tanganda board chairman Herbert Nkala said the operating environment was characterized by increased upward inflationary pressures, coupled with frequent electricity outages which resulted in high production costs.
He said this effect, combined with climatic changes particularly, extreme temperature fluctuations, hailstorms and erratic rainfall which affected yields, further weighed down performance during the financial year.
“Notwithstanding the operating environment challenges, the company remains focused on its value-addition prospects and cost management strategy. In historical cost terms, the profit after tax of ZWL15.45 billion grew by 270% over ZWL4.17 billion in the previous year,” said Nkala.
Nkala said the late onset of the rains and its relatively uneven distribution led to a decline in bulk tea production which saw the volume of 7 894 tons which were 9% below 8 670 tonnes produced in the prior season.
In turn, following the production trend, bulk tea exports of 6 238 tons were 12% below the previous year of 7 125 tons.
The export average selling price increased slightly to USD1.44 per kg from the prior season’s average selling price of USD1.42 per kg.
During the period, avocado exports of 2 148 tons were 50% below the prior year of 4 321 tons.
The Company exported 1 551 tons of macadamia (nut-in-shell) compared to 621 tons sold in the prior year with the unsold balance of 350 tons from the preceding year’s stocks being exported during the financial year.
Coffee production of 87 tons was 28% above the 68 tons achieved in the prior season.
The decline in packed tea sales volumes of 6% from 1 994 tons achieved in the prior year to 1 873 tons sold in this financial year was mainly due to logistical global challenges in sourcing inputs amid plans in place to clear unfulfilled orders, which will see volumes of our brands growing as we go into the coming year.
“The demand for our products remains relatively strong despite the impact of complex macro-economic factors on the local and regional markets. The growth strategy is to diversify the regional market further.
“The confidence from our customers and their support, including the value addition projects in the pipeline for our plantation crops, will increase profitability mainly as management focuses on efficiency in managing cost,” added Nkala.