TSL in mixed third quarter performance

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Business Reporter
Listed industrial firm, TSL Holdings’, performance across its various categories was generally depressed in the third quarter to July 31, 2020 dragged down by the impact of the Covid-19 pandemic.

Although operations continued over the period under review, with the business designated as an ‘essential service’, the national lockdown generally pushed sales volumes lower.

The national lockdown, which commenced on March 30, 2020 nearly coincided with the start of this year’s tobacco marketing season.

But there were also broader sector-specific problems that impacted on the group’ auction tobacco volumes.

The group reported that independent auction volumes at Tobacco Sales Floor (TSF) at 5.7 million kg were 73 percent below prior year “owing to the smaller tobacco crop, the late start to the tobacco season and auction floors not receiving the requisite approvals to decentralise.”

TSF still holds the largest market share in this segment and has the highest seasonal average price.

Contracted volumes handled for tobacco merchants at 7,9 million kg are 45 percent below the same period last year, said management.

TSL said volumes at Propak Hessian were down 21 percent due to the late start of the tobacco selling season and the decline in national tobacco crop.

“Procurement of hessian for the coming season is at an advanced stage, cognisant of likely disruptions in the supply chain. The foreign exchange auction market has eased the sourcing of currency,” said the group in its third quarter trading update report.

Subsidiary, Agricura recorded growth in market share and volumes across most product lines, largely attributable to product availability and more attractive pricing on locally manufactured products.

With respect to TSL’s farming operations, tobacco yields were satisfactory.

“Approximately two thirds of the crop had been sold and pricing was marginally lower than in prior year. Due to low dam water levels, the winter wheat programme was scaled back and water rationing was undertaken on the banana plantation,” said management.

“The business has opted not to sell the harvested maize and soya bean in the current period.”

The company’s logistics operations saw tobacco handling volumes slide 4 percent from prior year due to the late start of the tobacco selling season and delays in tobacco processing.

But on a positive note, the group’s distribution division recorded significant growth in volumes as new customers were secured.

Volumes in the ports business decreased by 37 percent, attributed to generally slower movement of both imports and exports owing to the Covid-19 pandemic.

Handling volumes at Premier Forklifts were 18 percent below prior year due to the delayed start of tobacco processing.

Expectedly forklift sales were also depressed during the period under review “as most customers held back on capital projects under lockdown,” said TSL.

Volumes in the freight forwarding and customs clearing business were depressed as imports by the customer base remained subdued.

Avis’ rental days were 39 percent below prior year as the business was significantly affected by the ban on both local and international travel.

With regards to the group’s real estate operations, management said occupancies were “satisfactory with voids in the quarter at under 5 percent.

Meanwhile, TSL said the construction of a 10 000 square metre world class warehouse is progressing well, notwithstanding delays have been encountered in the steel supply chain.

The warehouse is scheduled for completion and occupation in February 2021. Going forward, the group said it is difficult to assess the impact of the Covid-19 pandemic on its 2020 numbers as it is still evolving.