8 June 2014

Zimbabwe: Finance Costs Weigh Down Ariston

ARISTON Holdings Limited's profit after tax declined by more than half to US$984 353 in the six months ending March 31 2014 due to a 48% jump in finance costs.

In the same period last year, the company posted a profit after tax of US$2 million.

In a statement accompanying the group's results, Ariston said the borrowings for the group increased to US$14,1 million as a result of the rehabilitation programmes that the company undertook.

Revenue for the group went up by 29% to US$8,6 million in the period under review.

During the six-month period, Claremont Estate turnover of US$849 000 was 10% of group turnover, an increase of 12% compared to March 2013. An operating loss of US$606 000 was reported up from the US$365 000 operating loss recorded in the same period last year.

Kent Estates recorded an increase of 98% in turnover to US$631 000 compared to the previous period and contributed 7% to the group's turnover. South Down reported a turnover of US$4,1 million representing a 48% of group turnover. South Down recorded an operating loss of US$300 000 compared to US$90 000 loss during the same period last year.

The group said the macadamia harvest was slightly delayed by the persistent rains. But despite the late start production was in line with last year.

"Early season sales have started with firmer prices than last year. Despite the erratic power supplies, tea production was 40% up last year. This trend is expected to continue into the second half of the year and we expect forecast production for the season."

"With half the export teas still to sell, we expect a modest recovery in international tea prices in the second half of the year. Traditionally winter accounts for the bulk of blended tea sales," the group said.

The group said restructuring at Favco was complete and the combination of cost management and improved marketing of the estates' produce was now producing acceptable performance.

"Favco turnover was US$2,996 million and contributed 35% to group turnover. An operating profit of US$0,049 million was recorded compared to a loss of US$0,265 million in March 2013," the group said.

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