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Ariston fights to meet FY2020 financial targets

21 Feb, 2020 - 00:02 0 Views
Ariston fights to meet FY2020 financial targets Ariston Holdings

eBusiness Weekly

Kiyara Matambanadzo

Listed agri-business concern, Ariston Holdings’ revenue for the first quarter to December 31, 2019, was largely flat but the performance is an expected trend for the period.

To this extent, management maintains that its numbers are expected to meet targets for FY2020.

With the little rains that came through at the end of 2019, production of Ariston’s key products was constrained.

However, the rains have improved in the new year, giving hope to most agricultural sector players in the country, even to firms such as Ariston that can utilise irrigation infrastructure.

Zimbabwe’s agricultural sector is projected to grow by at least 5 percent in 2020, attributable to “a better rainfall during the 2019/2020 season, supported by timely disbursements of inputs”, according to the 2020 National Budget Statement.

Ariston’s production and sales volumes of macadamia, tea, avocado and poultry for the quarter were lower during the period under review.

Tea for the first quarter were marginally behind prior years on account of the dry spell experienced in Zimbabwe, which was compounded by the erratic availability of electricity required for irrigation.

Macadamia production and sales were low in the quarter, attributable to the fact that the group’s harvesting season only commences in March.

Low volumes in the first quarter is “indicative of greater macadamia nuts available at maturity. Mature nuts obtain better selling prices,” said                                                                                      management.

Fruit volumes increased in the quarter but the harvest was strategically delayed so as to have less product in stock during the festive period in order to pre-empt the reported typical drop in sales during the festive period.

Ariston management said the second quarter update will show a clearer image of the growth in the fruit category.

Sales of macadamia, fruit and poultry are in line with prior period.

The group, however, said export tea sales were subdued in the first quarter, with the situation already improving during the first month of 2020.

The group is currently primarily export-oriented as the local demand for their produce has declined due to economic challenges that have seen Zimbabweans cut back significantly.

Management also highlighted that the group has faced significant challenges – which they are tackling –  to production owing to the lack of electricity, lack of water for irrigation and disturbances to their farms.

Said the group in its trading update:

“The largest constraint remaining for the group is the incessant power outages, which negatively affect the group’s ability to irrigate orchards thus affecting tea leaf availability and quality.

“The group is currently evaluating installation of a solar power generation plant at the largest of its tea growing Estates in order to counter the negative effects of power outages.”

The group also reported that disturbances on farms hindered progress during the period under review and assured investors that its board and management are engaging the authorities in order to stop further hindrance.

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