TSL navigates challenges as logistics shines

TSL Limited, a leading logistics and agricultural company, reported a 2 percent year-on-year increase in revenue for the quarter ending January 31, 2024. This growth was primarily driven by volume gains, particularly within the logistics business segment.

The company's new business model, designed to provide comprehensive customer support throughout the supply chain, fueled significant volume growth in the logistics sector. TSL's rail services from Maputo and Beira maintained operations with satisfactory performance, while clearing and forwarding activities remained strong due to increased volumes from existing clients.

General cargo handling volumes saw a boost thanks to fertilizer shipments received via the Beira corridor and processed at the Mutare facility. However, general cargo storage volumes dipped slightly as customers shifted towards a just-in-time inventory approach.

Positively, tobacco handling volumes for the quarter jumped 28 percent yearon-year to 154,708 cartons, reflecting higher volumes from merchants. Similarly, fast-moving consumer goods (FMCG) distribution volumes surged 53 percent to 23,828 tonnes compared to the prior year, driven by expanding business with existing customers.

Despite economic headwinds, TSL's real estate operations demonstrated resilience. The company successfully reduced vacancy rates to 15 percent from 21 percent in the previous quarter, reflecting increased demand for warehousing space. To capitalize on this growing trend fueled by rising industrial activity, TSL is constructing a state-of-the-art 15,000 square meter warehouse in a prime location.

"The construction of this new warehouse is on track for completion and occupancy before the start of the tobacco marketing season," said Ms. Fadzayi Pedzisayi, company secretary.

The 2024 tobacco marketing season commenced on March 13th, with expectations of a lower national tobacco crop yield compared to the previous year.

The El Nino weather phenomenon is expected to negatively impact hessian volumes, while tobacco paper sales remained robust with a 116 percent year-on-year increase.

This growth reflects continued positive market response to the company's locally produced coated paper. TSL also initiated tobacco paper exports to Zambia during the quarter.

The company remains committed to its "moving agriculture" strategy and will proactively address the aforementioned operational challenges and the effects of lower rainfall on certain business units.

"We are confident that our proactive measures will ensure the continued creation and preservation of shareholder value," concluded Ms Pedzisayi.