TANGANDA Tea Company Ltd (TTCL) says it is optimistic that it has all the necessary mitigatory strategies to navigate the difficult terrain during the remaining part of the financial year.
This comes as the economic and operating environment is expected to remain difficult on the backdrop of continued exchange rate volatility and the resultant inflationary pressures.
In a statement accompanying its results for the six months ended March 30, 2023, TTCL reported that its revenue during the period grew by 70% to $10,97 billion from $6,46 million in the comparative period.
Profit after tax for the period rose by 24% to $1,47 billion from a 2022 comparative of $1,18 billion.
“The first half of the financial year was volatile characterised by currency instability, which increased upward inflationary pressures due to the adverse impact from the pass-through effect of exchange rate depreciation,” TTCL chairperson Herbert Nkala said in the statement for the period under review.
“In addition to this, climatic changes and deepened electricity shortages further weighed down economic activity over the reporting period. Notwithstanding the operating environment challenges, the company remains focused on its strategic value-addition thrust and cost management to mitigate pressures on profit margins.”
He said the economic and operating environment was expected to remain difficult given the continued exchange rate volatility and the resultant inflationary pressures.
“The company is optimistic that it has put in place necessary mitigatory strategies to navigate the difficult terrain during the remaining part of the financial year,” Nkala added.
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Despite the challenging environment, TTCL had nearly $2 to every dollar of debt, showing the firm was in a liquid position and had more than enough to cover its short-term liabilities.
This comes as the company’s total assets rose nearly 16% to close the period under review at $36,83 billion from $31,78 billion recorded as of September 30, 2022.
“Bulk tea production of 5 582 tonnes, despite the late onset of the rainy season exhibited noteworthy endurance being 6% lower than prior year production of 5 935 tonnes. Bulk tea exports of 3 415 tonnes, 9% below 3 747 tonnes followed the season production trend,” Nkala said.
“The export average selling price firmed slightly to US$1,45 per kg from prior year average selling price of US$1,43 per kg. The avocado and macadamia harvest commenced in earnest at the end of the reporting period.”
He said despite the liquidity challenges and waning consumer demand caused by reduced disposable incomes on the local market, packed tea sales volumes remained resilient at 929 tonnes, 7% below 993 tonnes achieved in the prior year.
