TANGANDA Tea Company Limited has developed alternative trading channels to counter the impact of the rapid fall in value of the local currency which saw packed tea volumes decline in the third quarter of its financial year 2023.
In a trading update for the third quarter ended June 30, 2023, Tanganda said while demand for its products remained fairly strong in spite of complex economic factors, inflationary pressures and local currency evaluation would continue to impact business performance.
“Demand for our product remains fairly strong in spite of complex economic factors. Inflationary pressures and local currency evaluation will however continue to impact business performance,” the firm said.
“Packed tea volumes were 7% below prior year as the rapid decline in local currency saw volumes with some of the major customers decreasing to counter this impact, the company continues to develop alternative trading channels.”
As a result of the late onset of the rainfall season, the company said tea production was 4% below comparable season and in turn bulk tea exports were 12% below prior year.
Macadamia production was in line with prior year.
On the other hand, the macadamia marketing season commenced earlier than the prior year season with 260 tonnes of current crop already exported in addition to the 475 tonnes that had remained unsold at the end of the prior year.
“Company revenue was 45% ahead of last year standing at $32 billion from $22 billion in inflation adjusted terms while revenue for the six months ended 30 June 2023 of $100 billion grew by 61% ahead of the prior year revenue of $62 billion,” it said.
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“As a result of the late onset of the rainfall season, tea production was 4% below the comparable season and in turn bulk tea exports were 12% below prior year.”
During the period, avocado production was 38% below prior year as a result of biennial bearing phenomenon coupled with the impact of extensive pruning carried out on the 55 hectares of the mature trees to rejuvenate them.
Tanganda said revenue from avocado exports was expected to be recognised at the end of the financial year.
Inflation adjusted profit after tax closed the period at $9 billion, which was 10% below prior year’s $10 billion as a result of the decline in plantation crop volumes.
This is expected to improve next year as crops come out of the biennial phenomenon.
