TZI earnings set for huge growth


Conrad Dube

TZI’s full year to September 30 earnings per share (EPS) for continuing operations could be five times the 2002 full year figure, analysts have said.
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Chief executive officer Hillary Duckworth in an interview said: “We expect an improvement on continuing operations’ attributable earnings and EPS recorded in the first six months based on our projections for an increase in volumes as we have come off low capacity utilization.


Analysts have forecast a range of between $37 -$45 for the company’s full year earnings per share.


For the six months ended March 31, total group earnings per share (EPS) gained significantly to $16,61 from $4,79 recorded in the same period last year, with continuing operations contributing $12,70 in the process.


Duckworth said both margins and volumes were on target based on indications from operating companies, although he could not be drawn into giving any figures. The group spent about $1,2 billion on capex including new dams and irrigation equipment in the last period. Analysts forecast capacity utilization at Fresca to increase by about 20% to 75% from the current 55% in the next nine months.


Financial director Alan du Toit said the company had adopted a two-approach system to increase utilisation capacity.


He said: “We have focused on increasing production on the fields by strengthening management team through the selection of the right land for our produce. We have also focused on improving utilisation within the factories through regular servicing of machines to reduce machine breakdown hours.”


He said due to the seasonal nature of the business, Agriflora recorded an increase in volumes during the current period whereas volume increase at Fresca would be reflected in nine months.


Total attributable earnings increased four times on the comparative six months period last year to $4 billion from $1,1 billion but stripping of the discontinuing


ART operations, TZI generated attributable profit to shareholders increased 1085% to $3,1 billion.


Duckworth said the export strategy had begun paying dividends with the establishment of businesses in Kenya and Tanzania under Strategies Holdings Africa, which has a 33% shareholding in Strategies Holdings Zimbabwe.


Asked on the logic of unbundling Strategies Holdings, the chief executive officer said Strategies Holdings could increase profitability and grow faster as a stand alone judging from the performances by the medical group’s operating companies such as Mars and Masca.


TZI would be a pure agribusiness post unbundling.


Analysts said the group could significantly surpass forecasts considering it was a euro or sterling company producing almost 100% for exports and therefore was not very much affected by Zimbabwean factors such as inflation, which reached 300% as at May 30.