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MarketScreener Homepage  >  Equities  >  Zimbabwe Stock Exchange  >  Meikles Limited    MEIK   ZW0009012114


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Meikles : Tanganda Records Tea Export Increase

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12/24/2019 | 09:06am EDT

Zimbabwe's biggest grower and producer of tea and coffee, Tanganda Tea Company Limited -- a subsidiary of Meikles Limited -- says bulk tea exports marginally increased although production suffered a significant decline during the half year to September 30, 2019.

According to Meikles group executive chairman John Moxon, bulk tea export sales rose a marginal 0,8 percent to 3 669 tonnes compared to 3 638 tonnes achieved during the same period last year.

Average international bulk tea export price for the period retreated to US$1,47/kg from US$1,68/kg in the six months period to 30 September 2018.

Volume of tea and coffee sales to the domestic market went down 25 percent due to diminishing disposable incomes.

The global tea market, however, registered a compounded annual growth rate (CAGR) of 5,63 percent during 2011 and 2018. In 2018 it reached 6,2 million tonnes and is expected to reach 7,58 million tonnes by 2024 according to a Global Tea Market Outlook to 2024 Report.

In Zimbabwe, the period under review saw the country experience persistent foreign currency shortages and inflationary pressures as the foreign currency exchange rate sky-rocketed on the illegal parallel market.

This resulted in waning disposable incomes.

During the period under review, bulk tea production declined by 25 percent primarily due to the drought worsened by the inability to irrigate as well as reduced tea factories operating hours because of intermittent electricity supply.

Industry wide, erratic power supplies have been a cause for concern as this has resulted in a significant reduction in production time as industry endures long hours of load shedding.

However, volume of macadamia nuts production grew significantly by 234 percent to 779 tonnes from 233 tonnes achieved in the prior year comparable period.

As at close of the period, 463 tonnes of the top graded crop had been sold at an average price of US$5,04 per kilogramme compared to 374 tonnes sold in prior year at US$5,07 per kilogramme.

Avocado production grew by 44 percent to 1 908 tonnes from 1 371 tonnes. The company also benefited from a 60 percent increase in average price of US$1,62/kg was as compared to US$1,01/kg realised in the previous period.

This year, tropical cyclone Idai hit some parts of Manicaland Province, which had a knock-on effect on businesses operating in the area such as Tanganda, whose avocado crop was affected. But this was offset by improved global prices.

"Despite the adverse effects of two hailstorms and Cyclone Idai on the Avocado crop, high world market price this season compensated for low crop grade," said Moxon.

On the monetary performance, Tanganda's revenue grew 564 percent to $104,3 million from $15,7 million recorded during the same prior year comparable period.

Earnings before interest, tax, depreciation and amortisation (EBITDA) grew 1 000 percent to $96 million while after tax profit grew 1 800 percent to $110,3 million.

Following acute power shortages being experienced in the country, the company's focus is on building internal power generation capacity and work on 1,8 MW solar farm at Ratelshoek, its biggest estate, which will commence before end of March 2020.

Similar projects will be rolled out to the remaining four estates.

Copyright The Herald. Distributed by AllAfrica Global Media (allAfrica.com)., source News Service English

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John Ralph Thomas Moxon Executive Chairman
Rugare Chidembo Independent Non-Executive Director
Kazilek Ncube Executive Director
James Andrew Mushore Independent Non-Executive Director
Tabani Mpofu Secretary
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