By Alois Vinga
LISTED industrial holdings group, TSL Limited has projected the 2023 selling season’s tobacco output to be between 5% to 10% higher when compared to volumes in a similar period last year.
Presenting a trading update this week, TSL company secretary, Fadzayi Pedzisayi revealed that the golden leaf’s output will be much higher this year.
“The Tobacco Industry Marketing Board announced 8 March 2023 as the commencement date of the 2023 tobacco marketing season, three weeks earlier than in the previous year.
“Indications are that national tobacco volumes are expected to range between 5% and 10% above prior year. Rainfall patterns across most of the country have been reasonable and are expected to bode well for summer cropping output,” she said.
In terms of group performance, TSL revenues in the first quarter were mainly from the supply of agricultural inputs, provision of logistics services, and real estate services primarily to the agriculture industry.
Revenue grew by 106% and 606% in inflation-adjusted and historical terms respectively for the quarter driven by firmer volumes in the agri-inputs business, a stronger performance in the logistics business, and increased uptake of tobacco packaging materials by customers in anticipation of the earlier start to the tobacco marketing season.
Sizeable capital projects, which are expected to enhance the earning capacity and quality of the Group, are at various stages of execution and will see an increase in the Group’s level of borrowings on the back of more sustainably priced facilities.
During the quarter, Tobacco Sales Floor undertook extensive preparations for the tobacco marketing season. The business doubled the capacity of its decentralised floor in Mvurwi to cater for increased contracted volumes, and augments the Harare, Karoi and Marondera floors.
“The Group continues to strategically invest to solve several key challenges facing the economy in pursuit of the “moving agriculture” strategy. The agribusinesses are expected to benefit from a larger tobacco crop and what is anticipated to be a good marketing season.
“The logistics business will continue to scale up rail volumes across a broad spectrum of commodities from both Maputo and Beira ports and widen the customer base,” added Pedzisayi.