By Varaidzo Zhakata
THE Tobacco Sales Limited Group performance was above board in the third quarter, ended 31 July 2020, despite recording a 73 percent decline in sales volumes.
The decline in sales volumes was mainly at independent auction to stand at 5.7 million kilograms, owing to the drop in smaller tobacco crop, coupled by a late start to the tobacco season and auction floors failure to receive the requisite approvals to decentralize.
The group also suffered a decline in contracted volumes handled for tobacco merchants, recording 7.9 million Kgs, signifying a 45% decline compared to the prior year. Work is being undertaken with industry players to ensure a smoother tobacco-marketing season in 2021.
Despite experiencing a decline in volumes at Propak Hessian, TSL confirmed that acquisition of hessian for the upcoming season has reached a higher level.
“Volumes at Propak Hessian were down 21%, due to the later start of the tobacco selling season and the decline in national tobacco crop. Procurement of hessian for the coming season is at an advanced stage, cognizant of likely disruptions in the supply chain,” stated TSL.
The Zimbabwe Stock Exchange (ZSE) listed firm said cash generation remained pleasing during the quarter with most of Group working capital requirements being funded from internally generated resources and local currency liquidity through financial institutions remained constrained during the period.
In its real estate operations, the group highlighted that occupancies remained satisfactory with voids less than 5% during the quarter.
Construction of a 10 000 square meter world-class warehouse is progressing as scheduled, although delays in steel supply chain were encountered and completion and occupancy are expected in February 2021.
For its outlook, the group said it expects the foreign currency exchange system to improve the availability of foreign currency for restocking, while capital investments are expected to continue to improve.
TSL said it would continue to implement its “moving agriculture” strategy with foreign currency generation, building resilience and value preservation being its key priorities.