TSL : Q1 Trading Update

TRADING UPDATE FOR THE FIRST QUARTER ENDED 31 JANUARY 2024

OPERATING ENVIRONMENT

Infla onary pressures, incessant power outages and liquidity challenges con nued in the quarter. The El Nino weather phenomenon caused delayed onset of the rainy season coupled with severe heat and long dry spells which nega vely impacted produc on in the agriculture sector. There will be a need to import grains in the current year to balance the produc on deficit.

The Tobacco Industry Marke ng Board announced 13 March 2024 as the commencement date of the 2024 tobacco marke ng season. Expecta ons are that the na onal tobacco crop volumes will be lower than in prior year.

BUSINESS PERFORMANCE

The Group changed its func onal currency to US$ from ZWL with effect from 1 November 2023 which is the beginning of the 2024 financial year. Group revenue for the quarter was 2% ahead of the compara ve period driven by volume growth, par cularly in the Logis cs business.

AGRICULTURE OPERATIONS

Propak hessian volumes were 21% below prior year at 724,322 from 912,259, a gap that is expected to narrow in the second quarter as the tobacco season commences. The effect of the El Nino weather phenomenon on the na onal tobacco crop size is, however, an cipated to reduce hessian volumes. Tobacco paper volumes were 116% ahead of prior year as the market con nued to respond posi vely to the locally coated paper. The company started expor ng tobacco paper into Zambia in the quarter.

Agricura's volumes, during the quarter, were depressed compared to prior year reflec ng the impact of the El Nino induced dry spell.

In the farming opera ons, the late start of the rainy season affected land prepara ons and plan ng, however, the target hectarages have been achieved. Yields are expected to be sa sfactory as most of the crop is under irriga on.

MARKETPLACE OPERATIONS

Tobacco Sales Floor undertook extensive prepara ons for the tobacco marke ng season. The business increased the capacity of its decentralized floors in Marondera and Karoi to cater for increased contracted volumes.

Zimbabwe Mercan le Exchange (ZMX) opera ons are an cipated to grow in the year.

LOGISTICS OPERATIONS

The Logis cs business recorded improved volume growth in the quarter due to the new business model, which supports the customer throughout the value chain. The rail service from both Maputo and Beira con nued to operate and performance to date was sa sfactory. Clearing and forwarding volumes remained strong due to improved volumes from exis ng customers. General cargo handling volumes were buoyed by fer lizer received via the Beira corridor and handled at the Mutare facility. General cargo storage volumes were depressed as most commodi es are received by customers on a just-in-

me basis. Tobacco handling volumes at 154,708 cartons were 28% ahead of compara ve period of 120,543 cartons due to improved volumes from merchants. FMCG distribu on volumes were 53% ahead of prior year at 23,828 tonnes from 15,590 tonnes, due to increased business from exis ng customers.

Premier Forkli hours at 124,112 were 10% ahead of the prior year of 112,991 hours as the business con nues to grow its volumes from both new and exis ng clients. Forkli sales were significantly ahead of the prior year.

Avis' rental days of 2,284 were 4% below prior year (2,374

days). Addi ons to the fleet are planned in the second quarter of the financial year.

REAL ESTATE OPERATIONS

Voids improved to 15% from 21% in the compara ve quarter due to improved demand for warehousing space. The construc on of the new, world class 15,000 square meter warehouse at a prime loca on is expected to be completed and occupied in me for the start of the tobacco marke ng season.

OUTLOOK

The Group will con nue to pursue key strategic ini a ves in line with its "moving agriculture" strategy.

The afore-men oned challenges in the opera ng environment and the impact of the lower-than-normalrainfall on some business units will be proac vely managed to ensure shareholder value is con nuously created and preserved.

By Order of the Board

Fadzayi Pedzisayi

Company Secretary

15 March 2024

Directors: A S Mandiwanza (Chairman), D Odoteye* (Chief Execu ve Officer), P Shah, B Ndebele, H Rudland, W Matsaira, M Nzwere, J Gracie, D Garwe, E Muvingi, B Zamchiya, P Mujaya*, P Shiri*. (* Execu ve)