AGRICULTURAL concern Ariston Holdings posted an after tax profit of $2,8 million in the full year to September from a loss position of $1,7 million in the prior year, on the back of cost-cutting measures and improved revenue generation.
The company is involved in the production of a variety of crops, poultry and livestock. It operates six business estates which include Blended Tea Factory, Claremont Estate, Clearwater Estate, Kent Estate, Roscommon Estate and Southdown Estates.
The operations of the tea growing units are fully integrated with the Blended Tea Factory (BTF) for value-addition for tea. Group revenue increased by 29% from $11 million to $14,1 million, with the fruit category, which comprises pome fruit, stone fruit, avocado and banana, recording a 64% increase on prior year.
“The improvement in pome and stone fruit revenue was driven by improved average selling prices due to overall improvements in fruit quality and size. There were modest increases in avocado and banana production volumes, with the average selling price for avocado remaining unchanged from prior year, while the average selling price for banana was down 12% on prior year,” the company said in a statement accompanying financial results.
Operating expenses declined by 4% as the company instituted cost cutting measures.
Gross margin for the year increased to 36% from 31% in the prior year, indicating the company was making a reasonable profit on sales.
Tea production volume was up 35% to 3 285 tonnes during the period, with the average selling prices increasing to $1,82 per kg from $1,73 per kg.
Macadamia volumes marginally grew to 1 324 tonnes from 1 251 tonnes.
The company noted that Southdown Estates in Chipinge, comprising Southdown, Clearwater, Roscommon and Blended Tea factory, continued to be the group’s dominant contributor to both revenue and profitability.
Ariston said as a predominant foreign currency generator, the group was able to ensure minimal disruptions to operations in the prevailing economic environment.
In the current year, Southdown Estates’ contribution to overall revenue declined to 80% from 83% in prior year, which is attributable to improved contribution to group revenue by Claremont and Kent Estate.
“The 2019 agricultural season has commenced on a good note. The group’s financial position continues to improve. The majority of our crops are designed for the export market and as long as the group continues to focus on quality and maintaining its international accreditation the strides made in 2018 will be improved soon. Early indications are that export prices and demand will continue to be firm for the forthcoming season,” the company said.–newsday.co.zw