TSL : Mulls Regional Expansion

July 17, 2020 at 06:06 am EDT

Listed diversified firm, TSL Limited, is mulling regional expansion, a move that will enhance its foreign currency exposure at a time Zimbabwe is experiencing limited access.

This comes at a time the group is working on foreign currency generation as one of its key focus areas for this current financial year and going forward.

The country has been experiencing foreign currency shortages that affected companies' ability to import essential raw materials, purchase equipment or meet their foreign obligations.

Apart from problems accessing foreign currency, businesses also had to deal with fuel shortages, erratic utilities supply as well as high inflation that eroded disposable incomes. All these have affected businesses at varying levels.

Experts have said under such an environment, companies need to be innovative and explore ways of boosting their foreign currency generation.

"Foreign currency generation remains a key priority across the group and all business units are strategically exploring regional expansion," said chairman Mr Anthony Mandiwanza in the group's recently published annual report for year 2019.

"The group will continue to position itself to take advantage of the opportunities for growth in pursuit of the 'moving agriculture' strategy.

"We will continue to invest in our people, upgrading our infrastructure, market presence, developing or technology platforms and leveraging on our local and regional partnerships," he said.

During the 2019 financial year, TSL's financial position remained sound as strategies were deployed to protect value.

The group maintained minimal foreign currency exposure and its gearing remaining low at 3 percent from 13 percent in the prior year.

According to the group, part of the income generated during the year was utilised to procure trade inventories with longer expiry periods as an inflation hedge and in preparation for upcoming seasons.

"Further, capital has been injected in upgrading facilities, technologies, plant and equipment in pursuit of moving agriculture strategy. Excess cash returned to shareholders in the firm of dividend," said Mr Mandiwanza.

In 2019, revenue jumped 61 percent to $454 million from $281 million recorded in the previous year.

Gross profit more than doubled to $411 million from $198 million in the comparable year.

Profit for the year came in at $124 million, which was 80 percent above 2018.

Meanwhile, TSL is scheduled to hold its annual general meeting today, where among other resolutions the group will seek shareholder approval for a share buyback scheme.