ZIMBABWE has recorded an 13% increase in tobacco output volumes since the commencement of the selling season in April, according to a report by the Tobacco Sales Limited (TSL) has reported.
Presenting a trading update for the third quarter ended July 31 2021, TSL company secretary James Muchando said both tobacco quantity and prices registered an upward trend attributable to a good rainy season.
"National tobacco volumes of 200 million kgs as of July 31 2021 are 13% above prior year, whilst the tobacco national average price at US$ 2,78 per kg is 11 % ahead of prior year. A good rainfall season has ensured that output of other agricultural commodities is likely to be well ahead of the previous season," he said.
Tobacco Sales Floor handled 16, 7 million kgs of tobacco in the quarter against 6,9 million kgs handled in the comparative period, an increase of 143%. Of this volume, 60% was on behalf of tobacco contractors in Harare and the new decentralised floors in Karoi and Marondera in line with the group's strategic thrust.
The group also achieved good volume growth across most business units and remains profitable. Revenue is ahead of prior year, for the quarter, by 9%.
"Adequate interest cover on borrowings is maintained with most working capital requirements funded from internally generated resources. The developments in the marketplace from May 2021 have increased pressures on margins and may adversely affect efforts to preserve value," he said.
Across other tobacco related operations, Agricura achieved strong volume growth across most product lines due to increased market share, stock availability and attractive pricing particularly on locally manufactured products.
On farming operations, the above-normal rainfall season resulted in good yields for the maize, Seed maize and soya bean crops.
Bak Logistics recorded good volume growth over the prior year in tobacco handling 28 %, distribution 36% , ports 285 % and transport 117 % divisions attributable to new clients being signed up and the commencement of transport services from decentralised tobacco floors.
"The group continues to pursue its "moving agriculture" strategy in a difficult operating environment and to invest accordingly to create and preserve shareholder value. The availability of foreign currency and appropriately priced financing will assist in taking advantage of the existing growth opportunities," added Muchando.