Tsl Limited 2023 Annual Report

TSL Limited | 2023 Annual Report

By Published On: March 11th, 2024Categories: Corporate announcement, Earnings

The Group continues to prioritise enhancement of shareholder value and sustainable growth. Group borrowings are foreign currency denominated and remain low with adequate interest cover.


The operating environment was marked by inflationary pressures, persistent power outages and liquidity challenges in both local and foreign currency. The economy has experienced a growing trend in dollarisation leading to higher proportions of transactions being conducted in US$. Patterns in consumer spending shifted more towards the informal sector.

The 2022/23 summer cropping season was reasonable across most of the country, with adequate rains. National tobacco volumes closed at 296 million kgs, 43% ahead of prior year and the national average tobacco price at US$3.03/kg, 1% below prior year price of US$3.06/kg. The independently grown tobacco crop closed at 7% of the national crop.


Notwithstanding the challenging trading conditions, the Group achieved good volume growth across most business units against prior year. Inflation adjusted revenue was up 159% underpinned by strong volume performance, particularly in the tobacco-related businesses. Operating profit before fair value adjustments was 89% above prior year. The ZWL$ cost structure of the business was inflated due to exchange rate volatility whilst foreign currency revenues were recorded at the official exchange rate. Local currency borrowings which had unsustainably high interest rates were paid off early in the year resulting in a reduction in finance costs by 50% compared to prior year.

The Group continues to prioritise enhancement of shareholder value and sustainable growth. Group borrowings are foreign currency denominated and remain low with adequate interest cover. The Group reinvested in the expansion of operations and payment of dividends to shareholders.

Property valuations
In the current year, an independent valuation of the Group’s property portfolio was done by Dawn Property Consultants based on ZWL$ inputs. The property portfolio was valued at ZWL$316.8 billion.

Note to users of financial statements

The Group’s consolidated financial statements have not been prepared in compliance with the requirements of IAS 21-The Effects of Changes in Foreign Exchange Rates in prior years. Consequently, the current year financial statements include residual effects of these prior year misstatements. The Board, therefore, advises users to exercise caution in the interpretation of these financial statements.


Propak hessian volumes were 32% ahead of prior year owing to stock availability and a larger tobacco national crop size. Tobacco paper volumes were 27% ahead of prior year, as the market continued to respond positively to the locally coated paper. This strategic move to increase paper production is in line with the Group’s sustainability drive.

Agricultural trading
Agricura’s volume performance for the year was mixed. Some product lines, particularly the locally produced animal health remedies and new grain protectants performed better than in the previous year on the back of product availability while other product lines’ volumes lagged due to depressed demand. Margin pressure negatively impacted the performance of the business unit. The Group concluded the buyout of a minority shareholder in Agricor (Private) Limited. This acquisition is expected to create increased flexibility for the business to expand and deepen its product offering to the market.

Farming Operations
The farming operations produced a superior quality of tobacco and achieved improved yields and price per kg on tobacco compared to the previous year. Favourable yields were achieved on soya beans and commercial maize although wheat production declined due to electricity availability challenges. The new banana plantation came into production in the year resulting in increased volumes.


Tobacco-related services
Tobacco Sales Floor cumulatively handled 51.9 million kgs of tobacco – a 125% increase on prior year’s 23.1 million kgs. The strategy to serve the much larger contracted tobacco market is yielding fruit, with 75% of the total volumes handled coming from this segment. These positive results are, in large measure, attributable to a larger national tobacco crop, successful decentralisation of operations and the acquisition of new customers. TSF continued to hold the largest market share in the independent auction segment (65%).

Commodities Exchange
ZMX introduced an orderly, streamlined, digitalized marketplace platform for trading and funding of agricultural commodities. The company, a licensed entity, facilitating the trade of 49 commodities including grains, cereals, pulses, horticulture and livestock successfully obtained liquid asset status for its warehouse receipts during the year. This status significantly enhances cash flows for farmers. The operations of ZMX have resulted in a number of policy amendments that will improve the marketing, financing, and trading of agricultural commodities. The business is in its infancy, and it is expected that the trading volumes will continue to increase in the near future.


End to end logistics services
The new business model, which supports the customer throughout the value chain, resulted in an increase in volumes across most of the logistics’ divisions. Tobacco handling volumes were 96% ahead of the prior year due to an increase in the customer base. The rail service from both Maputo and Beira continued to operate and performance was satisfactory. Clearing and forwarding volumes remained strong due to improved demand. General cargo handling volumes were depressed, 19% below prior year due to reduced fertiliser volumes. Volumes in the FMCG division increased by 32% on the back of new business, however, most customers’ volumes remained depressed as the formal retail sector struggled against the informal market. Premier Forklift volumes were 16% ahead of the prior year as the business continued to grow its volumes from both new and existing clients with the fleet on hire growing by 32%. Forklift sales were at par with the prior year volumes.

Vehicle rental
Avis’ rental days were below prior year by 12% due to a decline in the vehicle fleet in the period. The fleet was replenished towards the end of the year and more vehicles will be added in the upcoming financial year.


Occupancies, returns and the level of voids remained satisfactory due to improved demand for warehouse space. The Business completed the construction of a 9,000 square meter warehouse in Mvurwi, which supported the decentralised operations of TSF. A new world class 15,000 square meter warehouse in a prime location is under construction and is expected to be completed in the second quarter of the coming financial year.


The Group is committed to ensuring sustainability of the business and is guided by Global Reporting Initiative protocol and ISO 26000 for Social Responsibility. The Group aims to create sustainable economic value by pursuing a long-term approach to environmental stewardship, social responsibility, and corporate governance.


The Group will continue to pursue key strategic initiatives in line with its “moving agriculture” strategy. Several investments are lined up to scale up manufacturing, expand the capacity of the different business units, and improve efficiencies to deliver a superior offering to the marketplace across the agriculture and mining value chains. The Group’s digitalization drive continues to bear much fruit with more digital investments earmarked for the upcoming year.

The operating environment is expected to remain challenging and will be proactively managed to ensure continued shareholder value creation and preservation. Focus will be on enhancing the Group’s earnings, returns on invested capital, the Group’s long-term value proposition and strengthen the Group’s financial positioning.

The 2023/24 agricultural season is expected to have lower than normal rainfall which will have an impact on the performance of some of the Group’s business units.


At their meeting held on 30 January 2024, the Directors declared a final dividend of US$0.0015 per share payable in respect of all ordinary shares of the Company. This dividend is in respect of the financial year ending 31 October 2023 and will be payable in full to all shareholders of the Company registered at close of business on 19 April 2024.

The payment of this dividend will take place on or about 29 April 2024. The share of the Company will be traded cum-dividend on the stock exchange up to the market day of 16 April 2024 and ex-dividend as from 17 April 2024.

For and on behalf of the Board

A.S Mandiwanza

DOWNLOAD: TSL Limited Integrated Annual Report 2023.pdf

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