Ariston projects a 20pct decline in tea sales
By Almot Maqolo.
HARARE, Zimbabwe. (News of the South)- Agricultural concern, Ariston Holdings Limited has projected a 20 percent decline in overall tea sales during the second half of the year as the business was not spared from the impact of Covid-19.
The majority of its harvesting and selling activities occur in the second half of the year.
The firm is involved in the production of a variety of crops, poultry and livestock. Ariston operates six business units which includes Blended Tea Factory, Claremont Estate, Clearwater Estate, Kent Estate, Roscommon Estate and Southdown Estates.
Tea production volumes declined 2 percentage points to 1870 tonnes in the first six months ended 31 March 2020 from 1907 tonnes in the same period last year. Export tea sales volume and USD selling prices went down by 36 percent and 8 percent respectively.
“Tea harvesting slowed down due to decline in head count as a result of implementation of social distancing rules.
Export tea sales are subdued as the movement of tea samples is affected by airlines since demand for travel plummeted,” group Chairman Alexander Jongwe said in a statement on Tuesday.
“This is expected to result in 20 percent reduction in overall tea sales. Reduction in global tea demand has resulted in a 10 percent reduction in selling prices,” he said.
In the first half, local blended tea sales volumes and selling prices rose 31 percent and 841 percent respectively against the prior comparative period due to improved marketing of the product.
Macadamia volume was 10 percent lower than that recorded in the prior comparative period.
Further improvements in quality will enable the firm to obtain better export prices. At the end of H1, 30 percent of the annual crop had been harvested, with 14 percent of the annual production having been sold.
Exports made were at a price of 2 percent higher than that achieved in the prior comparative period.
Harvesting and selling of stone fruit had been completed at the end of H1. Production volume of stone fruit declined from 1207 tons to 1149 tons. Selling prices were fivefold ahead of those in prior period.
Pome fruit harvesting had started but had not been completed yet. 896 tons were harvested, which was 191 percent ahead of that achieved in the prior comparative period.
Production volumes for the FY are projected to be 5 percent ahead of prior year at 1 580 tonnes. Sales volume as at 31 March 2020 of 545 tons was 159 percent ahead of prior comparative period’s sales volume.
“Harvesting of macadamia, fruit and other horticultural products is unaffected with adequate labour for the operations existing on the Estates. Macadamia export sales remain firm as orders are on hand for the entire current season crop,” Jongwe said.
“Pome fruit exports have been negatively affected by suspension of airline services, hence 1 580 tonnes will have to be locally consumed. 30 percent of local pome fruit sales are made through the vendor market and since vendors are generally unable to operate during lockdown, there has been a decline in demand.”
During the lockdown, Jongwe said, delays in processing payments by local bankers constrained the business. Supply chain disruptions are being encountered as South Africa remains largely on lockdown.
The group’s inflation adjusted revenue for the half year reflects a 23 percent increase to Z$76.07 million from Z$61.82 million in the comparative period.
This was attributed to improved pricing recorded on macadamia due to quality improvement as well as improved local pricing of horticulture products sold during the period.
The crops contribute 83 percent to the group’s total revenue. Other crops, which include commercial maize, seed maize, seed sugar beans, soya beans, avocados, bananas and potatoes, representing 17 percent also contributed positively to the group’s overall performance.
In the outlook, the group’s financial performance for the year is expected to be in line with prior year.
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