Despite a dramatic decline in agricultural production largely because of the country’s agrarian reform programme, tobacco giant, TSL, saw its sales increase nearly three-fold from $6.2 billion to $16.2 billion.
According to its results for the year ending October, net profit more than quadruppled from $1 billion to $4.6 billion.
The company says its flagship, Tobacco Sales Floor, was adversely affected by the decline in the tobacco crop which dropped by 25 percent to 165 million kgs. This coming season is likely to be worse as the crop is estimated to decline to 75 million kgs.
It also says the tobacco exchange rate of $159 to the greenback was insufficient to allow TSF any meaningful growth.
Its subsidiaries that are directly involved in the supply of inputs to the agricultural sector were adversely affected by the land reform programme which saw reduced production of tobacco, wheat and other crops.
Though there was some growth in the horticultural sector, this was insufficient to compensate for the decline in other markets.
Hunyani did quite well with its contribution increasing by 200 percent over the previous year.
Profits for Bak Storage grew substantially.
Volumes of cigarettes produced by Cut Rag Processors continued to grow. Strong demand from export customers left the unit with a healthy order book at the end of the year.
TSL was the subject of a takeover bid by the Cotton Company of Zimbabwe but the negotiations were discontinued in January.