TSL Trading Update Shows Promising Outlook In Tobacco Industry

Author Name
Rugare Mukanganga
Markets 1 month ago

In a trading update for the three-months ended July 2021, the TSL Group recorded volume growth across most business units, driving an improved performance for the quarter.

  • Revenue up 9%
  • TSL volumes handled up 143%
  • Avis rental days up 121%

Revenue in the period was 9% ahead of the prior year in inflation adjusted terms. In addition to having sufficient interest coverage on borrowed funds, the Group also says most working capital requirements are adequately covered from internal resources.

The Group’s Tobacco Sales Floor handled 6.9m kgs more in the quarter than in the previous year’s comparable period. 60% of the quarter’s total came from contracted farming agreements.

Propak Hessien was 21% ahead of prior year volumes. However, total volumes delivered in the quarter fell 30%, a drop the Group attributes to an early seasonal start that led to most tobacco being delivered in the opening half of 2021.

In Bak Logistics, the Group recorded a 28% improvement in volumes of tobacco handling, 36% growth in distribution and 285% in ports. The Group attributed this unit’s growth to new client sign-ups and the start of new transport services from decentralised tobacco floors. Within this unit  however, a slowdown in capital projects was noted by the Group.

Within the Premier Forklifts division, volumes handled grew 28% in the quarter, while rental days were up 121% in the Group’s ca rental unit Avis.


National tobacco volumes were up 13% in the period under review, with an 11% improvement in average prices traded. Agricura recorded strong volume growth in the quarter which was the result of an increased market share, stock availability and attractive pricing. Tobacco, banana and chillies farmed were adversely affected by prior year droughts and low dam water levels, but good yields are expected from maize, Seed maize and soya beans crops. Within real estate operations, occupancy levels remained satisfactory.


We view favourable 2020/2021 bale pricing and a positive seasonal outturn as probable contributors to a second consecutive year of high tobacco farmer participation. Supporting these factors are positive preliminary rain forecasts, shaping-up the season ahead to be characterised by high volumes handled and distributed by the Group.  Factoring in the skewed volume traded trends towards contract sales, we expect to see higher contracted tobacco farming participation in the Group’s closing quarter, as well as the 2021/2022 sales & marketing season. With easing COVID-19 lockdowns, Avis rental days volumes should maintain growth, backed by improved mobility and demand for travel and tourism related activities.

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