Listed agriculture concern Ariston Holdings Limited tea production for the half year to March 31, 2024 surged by 14 percent to 1 830 tonnes compared to 1 599 tonnes recorded during the same period in the prior year despite bad weather.
The impact of the El Nino-induced climatic conditions was experienced at all of the group's estates, although to varying degrees. According to the group, year to date rainfall for the Chipinge estates was 19 percent below the prior year and 1 percent lower than the previous year for Chimanimani.
On the other hand, Norton's rainfall was severely affected at 21 percent below the prior comparative period, coupled with poor distribution characterised by a significant hot period of no rain.
Chairman Mr Alexander Jongwe revealed the group had mitigatory measures in place, to ensure that production volumes would not be severely affected, however, all dryland agricultural activities were limited.
During the period, the average selling price for tea improved by 6 percent although this was coupled with suppressed export tea demand, which resulted in export tea volumes declining by 56 percent.
This resulted in a 53 percent decline in export tea revenue.
However, local tea demand remained firm evidenced by the 40 percent increase in local tea sales volumes compared to the prior comparative period.
Overall, tea sales revenue ended the period 14 percent below the prior comparative period.
Macadamia production volumes for the period at 603 tonnes were 4 percent below the prior comparative period. During the current period, 386 tonnes of macadamia nuts were sold, but all these nuts were related to the stocks held at the start of the current year.
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"No current season macadamia nuts had been sold as of 31 March 2024 as the season commences in April. In the prior comparative period, no macadamia nuts were sold during the first half of the prior year as sales commenced in the second half of the year," said Mr Jongwe.
In terms of financial performance, revenue of US$2,427,642 generated during the first half of the year was 7 percent below the prior comparative period. This was mainly attributable to a decline in export tea volumes.
The decline in revenue realised, coupled with the 27 percent increase in the cost of production resulted in the group posting a gross loss during the period.
In the comparative period, the group had unrealised exchange losses, mainly arising from US dollar-denominated liabilities. Since the change in functional currency, exchange gains have been generated arising from Zimbabwe dollar-denominated liabilities.
Finance costs declined by 5 percent when compared to the prior comparative period.
"As a result of all the above, the group posted a 14 percent improvement in the loss incurred during the first half of the year," he said.
Total assets improved to US$31 million during the half-year period from the prior year's US$27 million.
While the operating environment is expected to remain challenging, the group is upbeat about a better selling season for the year.
For Ariston, the first year is a cost accumulation period while the second half sees better earnings marking the selling season.
