TSL dominates auction market share

Zimbabwe Stock Exchange (ZSE) listed Tobacco Sales Ltd (TSL) targets 2,5 million kg output on grower scheme and a combined tonnage of 4,5 million kg for this season, a company official said.

Report by Fidelity Mhlanga

TSL CEO Washington Matsaire last week said his company had managed to contain the risk of side marketing and had approached merchants so that tobacco goes through its auction floors.

“Where we felt there were risks, we have mitigated and we are very comfortable. We are keeping an eye on costs as they link to the scale of activities going on as costs were monitored in line with the scale of operations,”said Matsaire.

The diversified group’s profit after tax in the half year to April 2013 was US$3 million from U$S2,3 million last year.

Earnings per share rose to 29% to 9 US cents. The board resolved to declare an interim dividend of 2 US cents per share. Revenue was up by 31% to US$20 million compared to the prior year. Finance costs rose by more than 10 times to US$326 000.

Matsaire said the buoyant Propak and Tobacco Sales Floor contributed most revenue during the period under review.

He said this year contract sales were at 3,5 million kg compared to 500 000kg in 2012 contributing 10 % to revenue.

The company said the pricing model and contracts for Bak logistics were under review with a view of expanding basic product range with greater focus on container handling, freight forwarding, bulk grain and distribution, FMCA handling and distribution.

“Bak is looking and focusing on real logistics beyond storage searching for technical partnership, that will add value in the long-term.Plans were afoot to increase avis fleet in the second half of the year,” said Matsaire.

The first phase of expanding the warehouses was underway at a cost of US$3 million and on track for commissioning in October this year, with the second phase expected to commence in November, he said.

Matsaire added that for the past 15 to 20 years, the group has been expanding the warehouse on the back of firm contracts .

The company is also finalising the delisting of Chemco from the ZSE. In line with ZSE listing rules, a company seeking to go private has to make an offer to minority shareholders.