HORTICULRAL giant, Ariston Holdings yesterday said it took a 20% hit on revenue during the year ended September 30, 2021 stemming out of Zimbabwe’s long drawn exchange rate crisis.
The Zimbabwe Stock Exchange-listed firm saw its inflation adjusted revenue rise to $1,2 billion during the review period, after ending at $939 million during the comparable period in 2020, according to an annual report filed with the bourse.
“In the year under review, approximately 20% was lost from the revenue line as a result of the 40% Reserve Bank of Zimbabwe retention,” the firm said.
“Losses were made on fair value adjustments due to these being denominated inZimbabwe Stock Exchange (USD) and the USD interbank rate lagging behind inflation index.
“Inflation adjusted interest expense grew by 24% to $42 million in the current reporting period. The increase was driven by interest on local borrowings.” Ariston said.
Ariston said profit declined to 11% of revenue from 21% during the prior comparable period due to the impact of mismatches arising from revenue from exports where the RBZ retention, at 40%, was being paid at a rate significantly lower than that being charged by suppliers. It said this resulted in the erosion of value.
Ariston is banking on proceeds from the sale of its shares in Claremont Orchards Holdings to develop new and improved macadamia orchards following a transaction that saw the company disposing of 50% of its shareholding to Tuinbouw Zonder Grenzen.
The transaction inked with the Netherlands outfit was worth US$2 million.
Demand for high quality macadamia nuts held firm in the past year, although there was a slight weakening for smaller and lower quality produce.
However, selling prices for the domestic market remained relatively stable, the firm said.
Ariston said at the end of last year that the rationale behind the transaction was to raise funding for further investment into macadamia nut orchards in Chipinge and Chimanimani.
“Further, the transaction enabled the entry of a foreign shareholder who has undertaken to provide significant funding for expansion of Claremont Orchards into high value fruit and flower offering primarily for the export market. Cool and wet weather has been experienced in Chipinge and Chimanimani.
“We hope these favourable weather conditions continue as they will result in improved yields and quality of both macadamia and tea.
“The proceeds from the sale of shares in Claremont Orchards Holdings will be used in developing new and improving established macadamia orchards,” the company said.
The group’s balance sheet continued to improve during the period under review.
Revenue for the year ended September 30, 2021 reflected a growth of 31% compared to the prior year driven by an increase in sales of products grown and consumed on the local market.