eBusiness Weekly
HARARE – Listed agro-industrial firm, Ariston Holdings said on Thursday it requires an estimated US$1.5 million to rehabilitate its estates that were damaged by Cyclone Idai which hit mostly eastern parts of the country in March this year.
Tropical Cyclone Idai left hundreds of people dead, millions worth of infrastructure and houses destroyed.
Ariston, which produces and exports mainly horticultural products such as macadamia, tea and apples, has some of its estates in Chimanimani and Chipinge, which were the epicentre of the cyclone.
“While there was no loss of life, damage was incurred on infrastructure, including roads, bridges, irrigation equipment, housing and to a lesser extent, orchards,” said Ariston chief executive officer, Paul Spear.
“The group is currently seized with rebuilding the infrastructure that was damaged. Early indications are that US$1.5 million is required for this rehabilitation work. The Group is engaged with the matter through an insurance claim.”
Impact of the cyclone damage on group performance will likely be seen in the short term as Ariston managed to improve its financial performance in the half year ended March 2019.
Net profit for the period surged to RTGS$789 000 compared to RTGS$28 481 in the same period last year.
The group opted not to declare a dividend “in view of working capital constraints” and “the need to revitalise the productive assets as well as the need to preserve available cash resources.”
Group revenue was up 50 percent to RTGS$7.96 million.
“Revenue growth was driven by better pricing being achieved on export crops due to quality improvement and also the effect of the interbank rate where the RTGS$ has depreciated against the US dollar,” Spear said.
In terms of operations, the macadamia, tea, stone and pome fruit, which contribute about 89 percent to the group’s business, all contributed positively to the financial performance as revenues were up.
Spear said the group’s operating expenses charged 249 percent, reflecting the depreciation of the RTGS$ against the US dollar, as suppliers were charging for goods using an implied rate that is above the official exchange rate.
Fair value adjustment for the half year rose to $7.21 million compared to $0.50 million for the prior comparative period.
“The growth in fair value was largely driven by the effects of the underlying interbank exchange rate on the fair value of growing and mature crops destined for the export market which had not been harvested at half year,” said Spear. – New Ziana
