ZSE-listed agro industrial firm, Tanganda Tea Company Limited demonstrated resilience in third quarter (Q3) to June 2022, with profit after tax exceeding previous year in both inflation adjusted and historical cost terms despite hampered by increased operational costs and reduced consumer spending power.
The local currency depreciated by 160.74 percent between March and June 2022 against the United States Dollar on the auction market, and even worse on the parallel market which resulted in erosion of consumer power.
Externally, the geo-political instability in Russia and Ukraine disrupted supply chains with record inflation that also prompted tightened monetary conditions which had a bearing on exports.
In its Q3 trading update, the company said its packed tea sales volumes remained resilient though 5 percent below prior year due to global shipping and supply crisis and depressed disposable income on the domestic market.
Company revenue for the quarter under review was 135 percent ahead of the previous financial year in historical cost terms on volumes growth in majority of its commodities. Revenue for the nine months to June was also up by 84 percent.
“The Company is focusing on cost management to mitigate the adverse impact of rising inflation and exchange rate volatility to profit margins,” said the company.
Bulk tea export volumes achieved for the nine months were 7 percent above same period in the prior financial year; however production volumes were 7 percent below prior year following a prolonged dry spell at the onset of the season.
Coffee export volumes were 14 percent above same period prior year.
Avocado production of 3 494 tonnes was 12 percent above 3 108 tonnes achieved same period prior year.
Macadamia nuts harvested of 1 072 tonnes were 2 percent above prior year of 1 048 tonnes.
“Revenue from export of avocado fruit and macadamia nuts is expected to be recognised in the last quarter of the financial year,” the company said.
Tanganda expects yields of avocado and macadamia to increase, with enhanced maturity profiling of plantations over the next three to five years.
The solar plants constructed at three of the five estates have significantly reduced reliance on power from the national grid.
