TSL Limited says it has had a positive start to the year, recording a strong performance for the first quarter of 2018 riding on the strength of the diversity of its operations.
Making his last annual general meeting address as CEO yesterday, Mr Washington Matsaira told shareholders that despite the challenging operating environment, the group’s performance in the first quarter was above prior year.
“Generally, we have had a positive start to the year which is encouraging. The group has witnessed a strong performance so far,” he said.
Mr Matsaira said the commencement of the tobacco selling season would have a huge impact on the group’s overall performance.
The tobacco marketing season began on March 21.
This year, tobacco is expected to hit around 200 million kilograms compared to 189 million kilograms last year which management at TSL say would work in their favour. TSL, through its auction floors commands a significant share of the merchant auctioning system. Last year, its Tobacco Sales Floor retained its dominant position in the auctioning of independent crop with market share holding at over 60 percent.
The tobacco related business is also expected to benefit from the new business model introduced at Propak where hessian is now fully embedded with previous challenges of counterfeit wraps contained. Volume uptake for hessian last year grew by 11 percent as new merchant business was also acquired.
The logistics operations, although it experienced a strain from the challenging economic environment was beginning to recover driven by improvements in general cargo.
However, distribution and ports volumes remained depressed.
The real estate business performed above industry average and Mr Matsaira said plans were underway to upgrade its facilities. Sector wide, the real estate sector has suffered margin compression as voids increase due to depressed demand.
TSL is however anticipating to progress with plans for a commercial and industrial complex at the group’s Vosterman’s property.
In the outlook period, overall performance is anticipated to be in the positive with the eventual outtutrn of the tobacco selling season expected to be a key factor for the group.
Mr Matsaira is leaving the group end this months and he will be replaced by Pat Devenish, former managing director of TSF.