Tanganda Tea Company says it will explore value-addition options to mitigate faling profit margins, with the Zimbabwe Stock Exchange (ZSE) listed firm optimistic about its prospects this year on account of a good-looking tea crop and strong demand.
The company is the largest producer, packer and distributor of tea products in Zimbabwe and sells to wholesale and retail outlets in both the domestic and regional markets.
In a trading update for the quarter ended December 31, 2022, the company said it will also continue to strengthen its climate resilience through reservoir construction and building efficient irrigation systems for improved productivity.
“The company is focused on exploring value addition options and cost management and is optimistic about prospects for the financial year as all crops are looking good and there is firm demand for its products,” the company said.
In addition, Tanganda said interruption to business caused by ongoing power outages had been significantly reduced by the solar systems it installed at three of the company’s five estates.
For the quarter under review, Tanganda’s revenue jumped 48 percent as demand for products remained firm.
The company said performance remained satisfactory in spite of the inflation-induced increase in operating costs.
About 52 percent of the crop was produced in the month of December and is expected to be exported in subsequent months.
“Company revenue for the quarter grew by 48 percent over the prior year comparative period in inflation-adjusted terms. Performance remained satisfactory in spite of an inflation-induced increase in operating costs,” the company said.
It noted that despite the late onset of the rainy season, bulk tea production volumes were in line with the comparable prior year period.
Bulk tea export volumes, however, were 33 percent below prior year as 52 percent of the total volume was produced in the month of December and would be exported in subsequent months.
Picked tea sales volumes grew by 13 percent for the quarter, with export volumes into the region growing by 37 percent over prior year.
In the quarter under review, 325 tonnes of macadamia nuts were exported as nuts in a shell. – The Herald
