Ariston in 22pc revenue dip

HARARE - Agro-industrial firm Ariston Holdings Limited (Ariston) revenue in the full year to September 2016 slumped 22 percent to $9,2 million from $11,8 million, on the back of soft tea international prices and decline in macadamia volumes.

Ariston chairman, Alexander Jongwe, last week said tea production had also been affected by low rainfall and erratic power supply.

“Export tea prices across all grades were weak in the period under review, affecting tea contributions to the group’s financial performance.

“Tea sales volumes were down 12 percent to 652 tonnes,” Jongwe said, in a statement accompanying the company’s financials for the year under review.

The Ariston boss said predictions on the world market indicated tea pricing would continue to be soft on the back of high tea production and subdued demand from major consumers.

In the period under review, Ariston recorded an after tax profit of $124 639 from a loss of $1,7 million last year after $3,3 million in finance costs were reversed following a restructuring of the company’s debts.

The debt restructuring saw the major shareholder Origin Global Holdings convert a $4 million debt into equity.

As part of the transaction, Origin wrote off cumulative interest amounting to $3,3 million.

The transaction resulted in the reduction of the average cost of debt from 19 percent to 10 percent per annum with reduction in total liabilities from $33,4 million to $30,1 million.

Jongwe said the tea production volumes were expected to increase 60 percent on the current year volumes.

“So far limited rainfall and hot temperatures being experienced have resulted in low early season production.

“However, the season is predicted to have above normal rains.

“Inputs at higher levels than prior year are in place thus giving the comfort that the season ahead will show an improvement on current year,” said Jongwe, adding that blended tea sales were expected to improve marginally as marketing activities increase.

He also said the macadamia crop on the trees was good and expected to exceed previous levels.

“Measures have been taken to further improve the quality in line with the stringent export markets’ requirements.

“Macadamia prices remain firm and there has been strong interest from established buyers,” he said, adding pome fruit and stone fruit had shown a significant improvement on prior year production.

In terms of estate performance, Claremont Estates revenues dropped 44 percent to $1,1 million compared to $2 million in the prior year while Kent Estate revenue also dipped nine percent to $1 million as operating loss narrowed from $900 000 in the prior year to $500 000.

The group’s Southdown Estates contributed $7,1 million to revenue, about 77 percent of total group revenue.

Its operating profit however declined from $2,5 million last year to $1,3 million.

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