The prior year’s loss was driven by negative performance at Sable Chemicals but the awarding of a viable concessionary electricity tariff by the government impacted positively on the subsidiary’s performance, resulting in the reduction of losses from US$4,2 million in 2010 to US$100 000 in the year under review. However, Sable still performed below par, with capacity utilisation dropping from 37% to 34%, whilst production volumes were 8% below last year’s levels, mainly as a result of load shedding and power cuts.
Commenting on the performance of its fertiliser division, TA Holdings CEO Gavin Sainsbury told analysts in the capital early this week that the company knew the concessionary electricity tariffs would not be sustained into the future and therefore they were looking at alternative technologies.
“In a way we are going back to our roots,” he said, adding the group was repositioning Sable to import ammonia rather than manufacturing.
The Insurance division posted modest recovery with US$9,1 million after tax ,comprising mainly investment income of US$5,5 million.
TA said an improved mix of business with better risk profiles resulted in a lower claims ratio and an improved underwriting performance at Zimnat Lion, whilst Zimnat Life enjoyed a 55% jump in premium income, helped by an aggressive marketing and organic growth on its group business portfolio.
The hotels contributed US$1,1 million to the bottom line, with almost all of it coming from the Botswana operations, whilst the agro -chemicals division lost a combined US$7,181, a huge turnaround from the US$4,3 million lost during the prior year.
Total group turnover was US$62 million, a 19% growth from US$52 million in 2010.
Looking forward, TA sees a stronger recovery of its Zimbabwe insurance businesses and a subdued performance from its regional operations due to increasing competitive pressures in those markets.
The group has also started refurbishment work at its Cresta Lodge which also includes the building of a new conference centre to be completed by April 2013. It also plans to complete the works at its Cresta Mowana in Chobe, Botswana and Cresta Golf View Hotel, Lusaka, Zambia.
The company expects these initiatives to solidify the profit trends into 2012.