The group said it was still adjusting to dollarisation as mismatch of revenue and expenditure due to seasonality of operations resulted in the company posting an operating loss of US$809 789 from operations for the financial year ending September 25 2009.
During the period under review, loss before taxation and interest amounted to US$2 232 414.
In a statement accompanying the group’s financial results Ariston said the effects of the economic recovery on industry over the past few months have been positive.
“We welcome these changes as they can only result in the growth for the overall economy,” said Ariston.
“For the group, these changes at a time resulted in a mismatch of revenues and expenditures as a result of the operations. The group posted an operating loss during the period under review.”
“Total export sales volumes for the year were 55% below prior year whilst local sales volumes were 67% below the previous year,” said the group.
A late start to the season due to delayed rains, labour shortages, erratic power supply and generally low levels of working capital were major contributors to the negative performance of the business.
“However tea prices have continued to firm on key markets due to low supply from major producers,” said Ariston.
Looking ahead, volumes growth and an improvement in tea quality will remain the focus. Improvements in irrigation and mechanical harvesting will be necessary in order to achieve this.
According to the group, the tea business operations also include macadamia nuts. Local sales volumes were up 348% on year and export sales volumes were up 400% the previous year. Selling prices have however continued to decline over the years.
“Retail operation volumes were mostly below the previous financial year end but are showing signs of recovery. Disposable income and non-availability of funding have affected the pace of recovery,” the company said.
In horticulture, the last quarter volumes were much better than the corresponding period. However total annual volumes still lagged behind 2008 volumes.
Flower stems were 31% below the previous year, while total fruit volumes increased by 4%. Produce revenues were compromised by the quality of the crop due to insufficient inputs. Poultry production, which was temporarily, suspended due to input shortages us expected to resume in the first quarter of 2010.
Commenting about the outlook, Ariston said stability in the economic environment is expected to continue as a result of economic recovery programs. Consistent high volumes, high productivity, low production and quality will be important in giving the group a competitive edge.
“We remain confident that our strategies are appropriate and that growth and
profitability will be achieved. This
together with the commitment staff members should deliver value going forward,” Ariston said.