The Sunday News
Judith Phiri, Business Reporter
ZIMBABWE Stock Exchange (ZSE) listed tea producer Tanganda Tea Company Limited, says it is optimistic about its prospects during the last quarter of the financial year, having demonstrated resilience in the third quarter (Q3) ended 30 June 2022.
Zimbabwe Stock Exchange (ZSE)
Despite being hampered by increased operational costs and reduced consumer spending power in the Q3 the company’s profit after tax exceeded previous year in both inflation adjusted and historical cost terms.
In the trading update for Q3 ended 30 June 2022, the company said the revenue for the quarter under review was 135 percent ahead of the previous financial year in historical cost terms.
“Company revenue for the quarter under review was 135 percent ahead of the previous financial year in historical cost terms and three percent below comparative period in inflation adjusted terms.
Revenue for the nine months ended 30 June 2022 grew by 84 percent in historical cost terms and declined by 6 percent in inflation adjusted terms.”
The company said Q3 was characterised by surging inflation on the backdrop of sharp exchange rate volatility, as inflation increased from 72.7 percent as at 31 March 2022 to close at 191.6 percent as of 30 June 2022, resulting in increased operational costs and reduced consumer spending power.
It also noted that the local currency depreciated by 160.74 percent from March 2022 to June 2022 against the United States dollar on the auction market.
In a bid to stem rising inflation and currency instability, the Reserve Bank of Zimbabwe (RBZ) Monetary Policy Committee reviewed the bank policy interest rate from 80 percent to 200 percent per annum effective 1 July 2022.
Reserve Bank of Zimbabwe (RBZ)
“Despite the geo-political instability in Russia-Ukraine, bulk tea export volumes achieved for the nine months were seven percent above same period in the prior financial year, however, production volumes were seven percent below prior year following a prolonged dry spell at the onset of the season.
Coffee export volumes were 14 percent above same period prior year,” said the Tanganda statement.
Tanganda said packed tea sales volumes remained resilient though five percent below prior year due to global shipping and supply crisis and depressed disposable income on the domestic market.
Avocado production of 3 494 tonnes was 12 percent above 3 108 tonnes achieved same period prior year.
“Macadamia nuts harvested of 1 072 tonnes were two percent above prior year of 1 048 tonnes.
Revenue from export of avocado fruit and macadamia nuts is expected to be recognised in the last quarter of the financial year,” added the company statement.
It said it is focusing on cost management to mitigate the adverse impact of rising inflation and exchange rate volatility to profit margins.
“Inflationary pressures are expected to remain on the rise driven mainly by the continued exchange rate depreciation and general rise in global inflation.
The company is focusing on cost management to mitigate the adverse impact of rising inflation and exchange rate volatility to profit margins.
The company is, however, optimistic about its prospects during the last quarter of the financial year.”
