TSL Holdings Limited says its new paper packaging line will be ready by the next tobacco season after experiencing delays caused by the Covid-19 pandemic.
According to the group, installation of the machinery for the new processing line was delayed as the team from India who were supposed to assemble it were disrupted by the pandemic.
“A new paper processing line which is expected to produce high quality paper packaging at a lower cost has been imported and is now in the country.
“There have been delays in the installation of the machinery by the team from India, who have been unable to travel due to Covid-19 travel restrictions.
“The paper packaging line is expected to be installed later in the year and in time for the next season,” said company secretary James Muchando in a statement accompanying the group’s financials for the half year to April 30, 2021.
Meanwhile, the tobacco marketing season, which opened on April 7, 2021, saw Tobacco Sales Floor (TSF) handle 2,8 million kg and 4,5 million kg on behalf of independent growers and on behalf of merchants (contractors) respectively in the period.
“The contract handling model continues to receive attention as most of the tobacco grown in the country is under contract. TSF successfully opened and is operating contract handling floors in Marondera and Karoi on behalf of merchants,” said Muchando.
During the half year, group total revenue came in at $1,5 billion which was 33 perfect above prior year largely driven by volume growth in the agro inputs business.
An early start to the tobacco selling season resulted in increased volumes on auction in the first half of the year. The auction business has decentralised into Karoi and Marondera in addition to the Harare floors, providing services to merchants.
Muchando added the logistics business has successfully undertaken the management of the transport and logistics services to and from the decentralised selling points.
Profit from operations was 53 percent ahead of the comparative period and headline earnings rose 34 percent. Profit for the period jumped 51 prefer to $467 million from $308 million recorded during the comparable prior year period.
Muchando said: “The Group’s financial position remains strong, with gearing at under 5 percent and minimal foreign currency exposures. The trading businesses are adequately stocked with foreign currency requirements largely being met from sales to customers.
“The group has continued to generate positive cashflows which have been utilised internally to fund working capital, capital expenditure and paying dividends to shareholders. The new state of the art 10 000 square metre warehouse was completed in May 2021, and is now fully let and operational.”
Volumes in the logistics business during the period were generally depressed. Tobacco handling volumes went down 11 percent due to a smaller crop in prior year and a shorter processing season. General cargo volumes came in 31 percent below the comparative period.
Covid-19 pandemic had an adverse impact on the logistics business as it dampened customer activity.
Port and freight forwarding volumes lagged behind comparative period as the number of containers into the country significantly reduced while forklift hours were 5 percent below comparative period.
Distribution volumes rose 71 percent ahead of prior year due to improved volumes from major customers. Transport volumes jumped 75 percent above comparative period as the business commenced the management and transportation of tobacco to and from decentralised locations in Karoi and Marondera.
The vehicle rental services – Avis’ rental days fell 11 percent as the business unit continues to be affected by worldwide travel restrictions which resulted in reduced international travel.
Going ahead, economic pressures are anticipated to persist for the rest of the financial year, but the group will continue to monitor. Inflation in US dollar prices being experienced on the marketplace to ensure it does not adversely impact the sustainability of the group’s operations.
Muchando indicated new sources of more cost-effective funding are being explored for the initiatives that will be undertaken into the 2022 financial year.
“Focus remains on creating a resilient business with a strong balance sheet that enables sustainable value creation,” he said.