Ariston earnings plunge 27%
AGRO-INDUSTRIAL group Ariston Holdings has recorded a 27% decline in revenue in the first quarter ended 31 December 2022 compared to the prior comparative period.
In a statement, the group said the decline was a result of timing differences in potato harvesting and poultry placements. The decline in disposable incomes also affected revenue.
“The decline was attributable to potatoes which were sold in December in prior year whereas in the current year, these were sold in January 2023.
“Further, timing of poultry placements contributed to the revenue decline and the late season macadamia export in prior year boosted prior year revenue,” said the group.
There was also a 32% decline in potato production volumes in the quarter as planting of potatoes was delayed to avoid losses experienced when the fields are too waterlogged for potato harvesting. This pushed the harvesting to January 2023 while harvesting occurred in December in the prior comparative period.
Poultry production volumes dragged due to the reduction in the number of poultry placements, which was a result of the timing of placements. Poultry is produced on an outgrower model.
Meanwhile, tea sales volumes increased in the quarter under review compared to the prior comparative period. Local tea sales volumes registered a 102% increase as demand from local customers improved.
“The Group closed the financial year ended 2022 with some tea stocks, which were sold in the current period. The global economy activity recovered from the impact of the Covid-19 pandemic while global shipping shortages have improved resulting in a 229% increase in export tea sales,” said the company.
The group said it intensified its focus on improving tea quality to grow its export sales volume as the local economy is expected to continue to face headwinds.
“This shift in focus will result in lower tea production than in prior year in terms of overall quantity but will result in higher volumes of export grade teas than in the previous year.”
“Increased export sales will translate to increased profitability which mitigates against the effect of the low performance of the local market on the Group’s financial well-being,” the company said.
In addition, macadamia nut production volumes increased by 91%, while the sales volumes declined. This was due to prior period having late macadamia exports, which did not occur in the current year. The harvest of macadamia nuts begins in March hence the minimal production levels.
Basing on early indications, the group expects improvement in production volumes and quality of macadamia.
“It is still too early to determine the indicative macadamia selling prices, however, management believes that these should be in line with the prior year depressed price and that a real recovery in macadamia prices should be more evident in 2024,” added the group.