Ariston Holdings defied the disruptive impact of the Covid-19 pandemic on business operations worldwide after group revenue jumped by 64 percent to $425,5 million during the half year period to March 2021.
The upturn in revenue positively impacted on profitability; after the group reported operating profit surged 19 percent of revenue ($425 million) compared to a loss 19 percent in the comparative period last year.
The horticultural group said the revenue growth was mainly driven by an increase in sales of local products. Notably though, Ariston recorded a 37 percent decline in cost of sales during the period under review.
Ariston said the reduction in the cost of sales reflected measures implemented by the group aimed at containing costs, which resulted in gross margin improvement to 63 percent against 34 percent the prior year.
The group achieved profit before interest and tax of $118 million compared to $30 million incurred in the same comparative period last year, while inflation adjusted interest expense grew by 66 percent.
The increase, Ariston said, was driven mainly by interest from local borrowings. Overall, the group recorded a profit after tax of $28 million, which represented a 112 percent better outturn than the previous year.
"Production volumes improved on the back of good weather conditions. As at half year, production at 2 023 was 8 percent ahead of prior year's 1 870 tonnes, Ariston said in its half year financial results statement."
Export volumes, the group said, improved by 10 percent to 656 tonnes while current period pricing retreated by 2 percent. Local tea sales volumes jumped by 73 percent but prices fell39 percent.
Ariston said at the end of the current half year period, 32 percent of the projected annual crop had been produced compared to a slightly higher output volume of 37 percent the prior year.
"In volume terms, the production for the current year was 419 tonnes, of which 215 tonnes had been sold. For the same period, in the prior year, 389 tonnes had been produced, of which 178 tonnes had been sold," Ariston.
"The current year yield for the macadamia crop is expected to be 18 percent ahead of the prior year."
The fruit category's production volumes of 2 288 tonnes for the current half year under review improved by 12 percent compared to the previous comparative period. It comprises stone and pome fruit.
"Both fruits registered growth of 17 percent and 5 percent, respectively, as yields continue to improve. The selling period for stone fruit coincided with the lockdown promulgated by the Government in January 2021.
This had an adverse effect on fruit uptake in the market. Unfortunately, most of the export markets were also depressed due to Covid-19 lockdowns implemented in various countries.
Resultantly, Ariston said, stone fruit sales volume suffered a 14 percent decline compared to the prior comparative period. Pome fruit was not affected and the category grew by 6 percent.
Ariston said due to the cyclical nature of the group's activities, the majority of the harvesting and selling period occurs in the second half. Export of macadamia nuts is forecast in this period.
"Export macadamia demand is projected to remain firm; however, a slight decline in the average selling price is expected. Overall, the group is expecting an improved financial performance to the end of this financial period," Ariston said.