Tanganda Tea Company Limited (Tanganda) has reported a 12% decline in revenue for the first quarter ended December 31, 2024, attributing the drop to the late onset of rains. The company’s revenue fell to US$4.4 million from US$5 million recorded during the same period in 2023.
According to the firm’s latest trading update, the decline in revenue resulted in a loss before tax of US$853,917, primarily due to a reduction in tea production volumes.
“Company revenue for the quarter under review declined by 12% to US$4.4 million from US$5 million achieved in the prior year,” the company stated. “The company suffered a loss before tax of US$853,917 during the quarter due to a decline in tea production volumes.”
Tanganda highlighted that climate change continues to pose significant risks to the agribusiness sector, with erratic rainfall patterns negatively impacting output.
“The late onset of the rains negatively impacted bulk tea production for the quarter under review, resulting in a 26% decline in volumes to 1,463 tonnes from 1,986 tonnes produced in the previous year,” Tanganda said.
As a result, export volumes also took a hit, declining by 11% to 1,134 tonnes from 1,274 tonnes in the same period last year. Packed tea sales volumes were also affected, recording a 31% decline to 330 tonnes from 475 tonnes due to challenges in the formal wholesale and retail market, which constitutes the bulk of the company’s packed tea customers.
Tanganda also revealed that a consignment of 286 tonnes of macadamia nuts, which had been delayed due to logistical challenges in the previous financial year, was finally shipped during the quarter under review.
In response to these challenges, the company is exploring alternative routes to market while maintaining relationships with traditional wholesale, retail, and catering customers.
“This will create a balance of growth without hindering the recovery and performance of our traditional customer base,” Tanganda said.
Additionally, the firm acknowledged the impact of policy changes and currency distortions on its operations, stating that it has put in place mitigating strategies to enhance process efficiencies and manage costs to improve overall performance.
Despite the current difficulties, Tanganda remains optimistic about the future, particularly with expectations of improved agricultural output in 2025 due to the La Niña weather phenomenon, which is associated with normal to above-normal rainfall in the second half of the financial year.
“Notwithstanding the challenges in the operating environment, the company remains focused on adding value to its products. The company will continue to pursue sustainable market diversification to expand the regional and international markets,” the firm stated.
Meanwhile, Tanganda’s board of directors had initially planned to delist from the Zimbabwe Stock Exchange (ZSE) in favor of a listing on the Victoria Falls Stock Exchange (VFEX). However, in December 2024, the board decided instead to issue new shares and list on the VFEX while maintaining its presence on the ZSE.
As the company navigates these challenges, its long-term strategy will be crucial in ensuring resilience and growth in Zimbabwe’s volatile economic environment.
