AHL 2093 P1
R E V I E W E D F I N A N C I A L
H A L F Y E A R R E S U LT S
FOR THE SIX MONTHS ENDED 31 MARCH 2023
FINANCIAL HIGHLIGHTS
INFLATION ADJUSTED | HISTORICAL COST | |||
REVIEWED | UNAUDITED | |||
Period Ended | Period on Period | Half Year Ended | Period on Period | |
All figures in ZWL | 31-Mar-23 | Change | 31-Mar-23 | Change |
REVENUE (ZWL'000) | 2,431,402 | 13% | 2,199,615 | 292% |
EBITDA (excluding fair value adjustments) | (1,956,312) | 276% | (2,462,913) | 2244% |
(LOSS)/ PROFIT AFTER TAXATION (ZWL'000) | (2,265,816) | -600% | (2,080,944) | 815% |
BASIC EARNINGS PER SHARE (ZWL'000) | (1.3923) | -748% | (1.2787) | -885% |
HEADLINE EARNINGS PER SHARE (ZWL'000) | (6.5004) | -4279% | (1.2790) | -966% |
CHAIRMAN'S STATEMENT
INTRODUCTION
The season began with a dry spell followed by a period of greater rains than the prior year. On average, greater rainfall was received at all the operations for the current season than the prior comparative period. Further, the rainfall distribution was much better with more consistent rainfall over the period as opposed to a short period with excessive rains in prior year.
The local economic environment continued to be harsh, characterized by declining disposable incomes, incessant power outages which resulted in the use of costly alternative energy sources and greater depreciation of the Zimbabwe dollar coupled with increased dollarisation of the local economy.
FINANCIAL PERFORMANCE (on inflation adjusted terms)
In March 2023, Statutory Instrument 27 of 2023: Census and Statistics (General) Notice, 2023 was introduced. This legislation changed the measurement of Zimbabwe's inflation rate from measuring inflation against the use of the Zimbabwe dollar to a blended inflation rate measured on the weighted average based on the use of both the Zimbabwe and United States dollars. The official rate of inflation on just the Zimbabwe dollar, which is the Group's functional currency and the currency that is experiencing hyper-inflation, is no longer available, leaving the Group in a situation where comparative inflation adjusted figures are no longer available. The use of the blended consumer price index (CPI) for adjusting the Historical Cost financial results would be inappropriate, as the currency in hyperinflation, as defined, is the Zimbabwe dollar, not both currencies (as in Zimbabwe dollar and United States dollar). The Group has therefore estimated the CPIs for the months of February and March 2023 based on the movement in the interbank exchange rate between the United States dollar and the Zimbabwe dollar.
Revenue for the half year ended 31 March 2023 registered a 13% increase to ZWL2.4 billion compared to the prior comparative period. This was despite the fact that during the period under review, there had not yet been macadamia export sales. The increase was mainly driven by the improvement in export tea volumes coupled with an improvement in average selling prices for both local and export tea.
The Group posted an operating loss before interest and tax of ZWL 1.4 billion compared to a profit of ZWL 319 million in the prior comparative period. The loss position is mainly driven by unrealised exchange losses arising from United States Dollar denominated liabilities. Inflation adjusted interest expense increased by 310% to ZWL298 million in the current reporting period. This was mainly as a result of an increase in borrowings held during the current period. After taking into account deferred taxation of ZWL517 million, the Group posted an inflation adjusted loss after tax of ZWL2.3 billion, compared to a profit of ZWL349 million in the prior comparative period.
VOLUMES AND OPERATIONS
Tea
Tea production volumes achieved for the first half were 1,599 tonnes. This was a 21% decline from the prior comparative period. The decline is attributable to the Group's shift in strategy, in which, production volumes have been reduced by taking out lower yielding tea gardens and providing greater focus on improving quality so as to increase export volumes and value.
As a result of the change in strategy, coupled with the recovery of the global economy activity from the effects of COVID-19, there was a 51% increase in export tea volumes as well as a 16% increase in the average export selling price.
Local tea sales volumes declined by 24% as more sales were channeled to the export market in an effort to protect value, given the circumstances where the Zimbabwe dollar was depreciating significantly. The average selling price for local tea increased by 22% during the period under review.
Macadamia
The Group achieved a 31% growth in macadamia nut production volume when compared to the prior comparative period. As at 31 March 2023, 50% of the projected annual crop had been harvested as compared to 36% in the prior comparative period. However, exports had not yet commenced. In the prior comparative period, a late export delivery in October 2021 was recorded.
Whilst sales of macadamia had not occurred at half year, off take contracts were on hand. Challenges on logistics remained as in prior year, and these had the effect of slowing down deliveries, and therefore sales.
Other products
Other products comprise potatoes, commercial soya beans, seed soya beans, commercial maize, seed maize, sugar beans, bananas and poultry. There was a general increase in sales volumes for this category. As at half year, most of the produce under this category had not yet been harvested and was thus not in sales yet. Generally, yields look set to improve on prior year's achievements. Prices are expected to remain stable at the same levels as prior year.
INVESTMENTS
Due to the incessant power outages being experienced, the Group has re-organised itself and has also invested in a 500Kva Solar energy plant. This solar energy plant which was installed at Southdown Estate will alleviate the challenges brought about by the incessant power-cuts as well as the use of costly alternative measures, i.e. use of generators. Installation was completed in July 2023. On re-organisation, the tea production from Clearwater Tea Estate factory has been consolidated with Southdown Tea Estate factory by enhancing the Southdown factory efficiencies so as to enable it to carry the manufacturing capacities of both the Southdown and Clearwater tea factories in one factory. The effect of increasing manufacturing volume coupled with the use of the cheaper new solar energy plant is expected to produce benefits to the Group in the medium term.
Further, the Group continues to hold investments in joint ventures which continue to contribute positively to the Group's financial performance.
OUTLOOK
Due to the cyclical nature of the Group's agricultural model, the majority of the selling activities occur in the second half of the year. Macadamia nut exports have commenced, with indications that there is greater interest for the product in current year compared to the prior year, as the global market recovers from the effects of the COVID-19 pandemic. However, average selling prices are expected to remain the same as those achieved in prior year. Tea prices are expected to remain firm. The prices for the other products are also expected to be firm. Indicative yields are showing an improvement on comparative prior period.
The solar energy project, which was completed in July 2023 is expected to result in reduced energy costs and predictability to the manufacturing processes.
Going forward, cost containment remains a key focus area for the Group as it remains resilient in the challenging business environment it operates in. The Group continues to hope for more stable policies that will improve quality of business decisions and planning.
DIVIDEND
In view of the need to revitalise the productive assets and the need to preserve available cash resources, the Board has seen it prudent not to declare a dividend.
DIRECTORATE
There have been no changes in the Directorate since our last pronouncement at the AGM held in February 2023.
APPRECIATION
I would like to extend my appreciation to all our customers, suppliers, staff, shareholders, strategic partners and my fellow Board directors for their continued support for the business.
BY ORDER OF THE BOARD
ALEXANDER CRISPEN JONGWE
CHAIRMAN
07 AUGUST 2023
CONDENSED GROUP STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
INFLATION ADJUSTED | *HISTORICAL COST | ||||
REVIEWED | REVIEWED | ||||
Half Year | Half Year | Half Year | Half Year | ||
Ended | Ended | Ended | Ended | ||
All figures in ZWL'000 | Notes | 31-Mar-23 | 31-Mar-22 | 31-Mar-23 | 31-Mar-22 |
Revenue | 8 | 2,431,402 | 2,149,064 | 2,199,615 | 560,574 |
Cost of production | (2,354,037) | (1,421,582) | (1,717,160) | (319,151) | |
Gross profit | 77,365 | 727,482 | 482,455 | 241,423 | |
Other operating income | 70,836 | 107,257 | 64,906 | 27,927 | |
Operating expenses | (2,549,597) | (1,303,544) | (2,050,376) | (293,177) | |
Fair value adjustments | 1,501,571 | 1,074,807 | 1,985,399 | 459,515 | |
(Loss)/ Profit from operations | (899,825) | 606,002 | 482,384 | 435,688 | |
Exchange loss | (2,073,320) | (355,202) | (1,959,390) | (115,865) | |
Monetary gain/(loss) | 1,191,524 | (8,528) | - | - | |
Share of net profit of a joint ventures accounted for using | |||||
the equity method | 5 | 330,978 | 76,729 | 257,713 | 29,361 |
(Loss)/ Profit before interest and taxation | (1,450,643) | 319,001 | (1,219,293) | 349,184 | |
Finance costs | (298,217) | (72,807) | (268,603) | (19,212) | |
(Loss)/ Profit before taxation | (1,748,860) | 246,194 | (1,487,896) | 329,972 | |
Income tax benefit/ (expense) | 4 | (516,956) | 103,296 | (593,048) | (64,841) |
(Loss)/ Profit for the year | (2,265,816) | 349,490 | (2,080,944) | 265,131 | |
Other comprehensive income | - | - | - | - | |
Total comprehensive income before tax on | |||||
comprehensive income | (2,265,816) | 349,490 | (2,080,944) | 265,131 | |
Tax on other comprehensive income | - | - | - | - | |
Total comprehensive income for the year | (2,265,816) | 349,490 | (2,080,944) | 265,131 | |
Number of shares in issue | 1,627,396 | 1,627,396 | 1,627,396 | 1,627,396 | |
Weighted average number of shares in issue | 1,627,396 | 1,627,396 | 1,627,396 | 1,627,396 | |
Earnings per share (dollars) | |||||
Basic earnings per share | (1.3923) | 0.2148 | (1.2787) | 0.1629 | |
Diluted earnings per share | (1.3923) | 0.2148 | (1.2787) | 0.1629 |
* Historical amounts have been presented as supplementary information and were not subject to an audit or review.
CONDENSED GROUP STATEMENT OF FINANCIAL POSITION
INFLATION ADJUSTED | *HISTORICAL COST | ||||||
REVIEWED | REVIEWED | AUDITED | |||||
As at | As at | As at | As at | As at | As at | ||
All figures in ZWL'000 | Notes | 31-Mar-23 | 31-Mar-22 | 30-Sep-22 | 31-Mar-23 | 31-Mar-22 | 30-Sep-22 |
ASSETS | |||||||
Non - current assets | |||||||
Property, plant and equipment | 16,604,001 | 6,541,795 | 17,401,652 | 10,010,440 | 211,968 | 10,599,601 | |
Biological assets | 105,666 | 39,073 | 89,681 | 105,666 | 11,543 | 70,670 | |
Right of use assets | 74,247 | 98,432 | 95,325 | 29,240 | 562 | 4,381 | |
Investment in joint ventures | 5 | 1,429,799 | 1,058,888 | 1,098,821 | 613,354 | 182,360 | 355,641 |
18,213,713 | 7,738,188 | 18,685,479 | 10,758,700 | 406,433 | 11,030,293 | ||
Current assets | |||||||
Biological assets | 3,678,254 | 2,644,332 | 2,192,668 | 3,678,254 | 781,197 | 1,727,852 | |
Inventories | 1,722,488 | 1,116,045 | 990,157 | 1,685,722 | 314,306 | 690,094 | |
Trade and other receivables | 2,131,135 | 407,769 | 3,165,840 | 2,124,254 | 116,264 | 2,488,568 | |
Cash and cash equivalents | 36,003 | 16,125 | 284,014 | 36,003 | 4,764 | 223,807 | |
7,567,880 | 4,184,271 | 6,632,679 | 7,524,233 | 1,216,531 | 5,130,321 | ||
TOTAL ASSETS | 25,781,593 | 11,922,459 | 25,318,158 | 18,282,933 | 1,622,964 | 16,160,614 | |
EQUITY | |||||||
Share capital and reserves | |||||||
Share capital | 409,567 | 409,567 | 409,567 | 1,627 | 1,627 | 1,627 | |
Share premium | 2,748,818 | 2,748,818 | 2,748,818 | 10,922 | 10,922 | 10,922 | |
Revaluation reserve | 9 | 8,312,330 | - | 8,312,330 | 7,798,759 | - | 7,798,759 |
Distributable reserves | 1,627,373 | 5,163,158 | 3,893,189 | (1,605,546) | 674,334 | 475,398 | |
13,098,088 | 8,321,543 | 15,363,904 | 6,205,762 | 686,883 | 8,286,706 | ||
LIABILITIES | |||||||
Non-current liabilities | |||||||
Borrowings | 7 | 5,464,613 | 65,012 | 4,138,129 | 5,464,613 | 19,206 | 3,260,902 |
Deferred tax | 4b | 3,744,009 | 929,143 | 3,227,053 | 3,181,311 | 146,895 | 2,588,263 |
Lease liabilities | 70,588 | - | 29,350 | 70,588 | - | 23,128 | |
9,279,210 | 994,155 | 7,394,532 | 8,716,512 | 166,101 | 5,872,293 | ||
Current liabilities | |||||||
Borrowings | 7 | 687,422 | 621,975 | 903,869 | 687,422 | 183,746 | 712,261 |
Trade and other payables | 6 | 2,217,982 | 1,541,435 | 1,622,716 | 2,206,314 | 477,655 | 1,263,242 |
Contract liabilities | 489,717 | 411,674 | 25,147 | 457,749 | 99,221 | 19,816 | |
Lease liabilities | 9,174 | 31,677 | 7,990 | 9,174 | 9,358 | 6,296 | |
3,404,295 | 2,606,761 | 2,559,722 | 3,360,659 | 769,980 | 2,001,615 | ||
TOTAL EQUITY AND | |||||||
LIABILITIES | 25,781,593 | 11,922,459 | 25,318,158 | 18,282,933 | 1,622,964 | 16,160,614 |
* Historical amounts have been presented as supplementary information and were not subject to an audit or review.
CONDENSED GROUP STATEMENT OF CASHFLOWS
INFLATION ADJUSTED | *HISTORICAL COST | |||
REVIEWED | REVIEWED | |||
Half Year | Half Year | Half Year | Half Year | |
Ended | Ended | Ended | Ended | |
All figures in ZWL'000 | 31-Mar-23 | 31-Mar-22 | 31-Mar-23 | 31-Mar-22 |
Cash flows from operating activities | ||||
(Loss)/ profit before taxation | (1,748,860) | 246,194 | (1,487,896) | 329,972 |
Change in working capital | 1,362,210 | 244,246 | 749,692 | (55,776) |
Non-cash items | (837,290) | (608,612) | (1,529,146) | (473,450) |
Cash (utilised in)/ generated from operating activities | (1,223,940) | (118,172) | (2,267,350) | (199,254) |
Cash flows from investing activities | ||||
Payments for property, plant and equipment acquired | (177,173) | (388,596) | (150,209) | (97,764) |
Proceeds from sale of property, plant and equipment | 643 | 2,038 | 545 | 211 |
Proceeds from sale of investments | - | 1,793,373 | - | 529,520 |
Cash generated from/ (utilised in) investing activities | (176,530) | 1,406,815 | (149,664) | 431,967 |
Cash flows from financing activities | ||||
Cash utilised in financing activities | (2,293,469) | (1,573,292) | (1,201,134) | (283,105) |
Cash generated from financing activities | 3,445,928 | 262,799 | 3,430,344 | 47,289 |
Cash generated from financing activities | 1,152,459 | (1,310,493) | 2,229,210 | (235,816) |
Net increase/ (decrease) in cash and cash equivalents | (248,011) | (21,850) | (187,804) | (3,103) |
Cash and cash equivalents at beginning of the year | 284,014 | 37,975 | 223,807 | 7,867 |
Cash and cash equivalents at the end of the year | 36,003 | 16,125 | 36,003 | 4,764 |
* Historical amounts have been presented as supplementary information and were not subject to an audit or review.
Directors: Mr. A.C. Jongwe (Chairman), Mr. P.T. Spear* (Chief Executive Officer), Mr. I. Chagonda, Mr. C.P. Conradie, Mrs.T.C. Mazingi, Mr. J.W. Riekert, Mr. Z.T. Zifamba. * Executive
Registered Office: 18 Coghlan Road, Harare, Zimbabwe, P.O. Box 4019,
REVIEWED HALF YEAR FINANCIAL RESULTS FOR THE SIX MONTHS ENDED 31 MARCH 2023
CONDENSED GROUP STATEMENT OF CHANGES IN EQUITY
INFLATION ADJUSTED | |||||
Share | Revaluation | Distributable | |||
All figures in ZWL'000 | Share Capital | Premium | Reserve | Reserves | Total |
Balance as at 30 September 2021 | 409,567 | 2,748,818 | - | 5,133,169 | 8,291,555 |
Dividends declared for the 2021 financial year | - | - | - | (319,501) | (319,501) |
Total comprehensive income for the period | - | - | - | 349,490 | 349,490 |
Balance as at 31 March 2022 | 409,567 | 2,748,818 | - | 5,163,158 | 8,321,543 |
Total comprehensive income for the period | - | - | 8,312,330 | (1,269,969) | 7,042,361 |
Balance as at 30 September 2022 | 409,567 | 2,748,818 | 8,312,330 | 3,893,189 | 15,363,904 |
Total comprehensive income for the period | - | - | - | (2,265,816) | (2,265,816) |
Balance as at 31 March 2023 | 409,567 | 2,748,818 | 8,312,330 | 1,627,373 | 13,098,088 |
*HISTORICAL COST | |||||
Share | Revaluation | Distributable | |||
All figures in ZWL'000 | Share Capital | Premium | Reserve | Reserves | Total |
Balance as at 30 September 2021 | 1,627 | 10,922 | - | 503,592 | 516,141 |
Dividends declared for the 2021 financial year | - | - | - | (94,388) | (94,388) |
Total comprehensive income for the period | - | - | - | 265,130 | 265,130 |
Balance as at 31 March 2022 | 1,627 | 10,922 | - | 674,334 | 686,883 |
Total comprehensive income for the period | - | - | 7,798,759 | (198,936) | 7,599,823 |
Balance as at 30 September 2022 | 1,627 | 10,922 | 7,798,759 | 475,398 | 8,286,706 |
Total comprehensive income for the period | - | - | - | (2,080,944) | (2,080,944) |
Balance as at 31 March 2023 | 1,627 | 10,922 | 7,798,759 | (1,605,546) | 6,205,762 |
* Historical amounts have been presented as supplementary information and were not subject to an audit or review.
CONDENSED NOTES AND SUPPLEMENTARY INFORMATION
INFLATION ADJUSTED | *HISTORICAL COST | |||
REVIEWED | REVIEWED | |||
Half Year | Half Year | Half Year | Half Year | |
Ended | Ended | Ended | Ended | |
All figures in ZWL'000 | 31-Mar-23 | 31-Mar-22 | 31-Mar-23 | 31-Mar-22 |
- Depreciation and amortisation
Depreciation of property, plant and equipment excluding
bearer plants | 911,063 | 150,516 | 739,111 | 4,863 |
Depreciation of bearer plants | 63,760 | 63,609 | 260 | 253 |
Depreciation of right of use assets | 21,078 | 21,078 | 2,409 | 149 |
995,901 | 235,203 | 741,780 | 5,265 |
- Capital expenditure for the period
Purchase of property plant and equipment excluding
bearer plants | 100,324 | 367,405 | 87,742 | 92,403 | |
Capital expenditure incurred on bearer plants | 76,849 | 21,191 | 62,467 | 5,361 | |
177,173 | 388,596 | 150,209 | 97,764 | ||
3 | Commitments for capital expenditure | ||||
Authorised by directors but not contracted | 984,279 | 363,371 | 984,279 | 107,348 | |
984,279 | 363,371 | 984,279 | 107,348 |
The capital expenditure will be financed out of the
Group's own resources and existing facilities.
- Income tax expense
Current tax | - | - | - | - | ||
Deferred tax movement | 516,956 | (103,296) | 593,048 | 64,841 | ||
516,956 | (103,296) | 593,048 | 64,841 | |||
INFLATION ADJUSTED | *HISTORICAL COST | |||||
REVIEWED | AUDITED | |||||
Half Year | Half Year | |||||
Ended | Year Ended | Ended | Year Ended | |||
All figures in ZWL'000 | 31-Mar-23 | 30-Sep-22 | 31-Mar-23 | 30-Sep-22 | ||
4b | Deferred tax liability | |||||
Carrying amount at the beginning of the period | 3,227,053 | 1,032,438 | 2,588,263 | 82,054 | ||
Movement through profit/ loss | 516,956 | (534,939) | 593,048 | (54,701) | ||
Movement through other comprehensive income | - | 2,729,554 | - | 2,560,910 | ||
Carrying amount at the end of the period | 3,744,009 | 3,227,053 | 3,181,311 | 2,588,263 | ||
Analysis of deferred tax liability | ||||||
Property, plant and equipment | 2,973,825 | 3,198,481 | 2,422,216 | 2,583,234 | ||
Biological assets | 935,385 | 564,197 | 935,385 | 444,595 | ||
Right of use | 18,354 | 23,564 | 7,265 | 1,083 | ||
Prepayments and receivables | (2,897) | (2,864) | (2,897) | (2,257) | ||
Provisions | 15,330 | (37,740) | 15,330 | (29,740) | ||
Unrealised exchange loss | (1,549) | (516,619) | (1,549) | (407,103) | ||
Assessed losses | (194,439) | (1,966) | (194,439) | (1,549) | ||
3,744,009 | 3,227,053 | 3,181,311 | 2,588,263 |
- Investment in joint ventures
Beginning of the period | 1,098,821 | 982,157 | 355,641 | 152,998 |
Share of profit for the period | 330,978 | 158,887 | 257,713 | 222,957 |
Dividends received | - | (42,223) | - | (20,314) |
End of the period | 1,429,799 | 1,098,821 | 613,354 | 355,641 |
- Trade and other payables
Trade payables | 2,110,979 | 960,061 | 2,110,979 | 756,539 | |
Dividends declared for the 2021 financial year | - | 80,648 | - | 63,552 | |
Other payables* | 107,003 | 582,007 | 95,335 | 443,151 | |
2,217,982 | 1,622,716 | 2,206,314 | 1,263,242 | ||
*Other payables include provisions and statutory | |||||
liabilities | |||||
7 | Borrowings | ||||
At amortised cost | |||||
Loans from banks | 1,973,853 | 1,955,374 | 1,973,853 | 1,540,862 | |
Bank overdrafts | 105,518 | 133,723 | 105,518 | 105,375 | |
Loans from related parties | 4,072,664 | 2,952,901 | 4,072,664 | 2,326,926 | |
6,152,035 | 5,041,998 | 6,152,035 | 3,973,163 | ||
Long-term | 5,464,613 | 4,138,129 | 5,464,613 | 3,260,902 | |
Short-term | 687,422 | 903,869 | 687,422 | 712,261 | |
6,152,035 | 5,041,998 | 6,152,035 | 3,973,163 | ||
The movement of borrowings is shown below: | |||||
Carrying amount at the beginning of the period | 5,041,999 | 1,706,662 | 3,973,163 | 353,540 | |
Proceeds | 1,348,158 | 6,516,404 | 1,348,158 | 4,248,430 | |
Repayments | (1,201,134) | (3,395,845) | (1,201,134) | (748,477) | |
Movements in exchange rates | 2,031,848 | 289,794 | 2,031,848 | 119,670 | |
Inflation adjustments | (1,068,836) | (75,017) | - | - | |
Carrying amount at the end of the period | 6,152,035 | 5,041,998 | 6,152,035 | 3,973,163 |
- Bank loans of ZWL 1,973,853,424 (2022: ZWL 1,955,375,422) are secured by an assignment of export receivables between Ariston Management Services and 2 customers and an act of surety signed for the full amount of exposure.
The average effective interest rate on bank loans approximates 12% (2022: 10%) per annum. - Bank overdrafts are repayable on demand. Overdrafts of ZWL 105,518,227 (2022: ZWL 133,722,704) have been secured
by joint and several guarantees. The average effective interest rate on bank overdrafts approximates 75% (2022: 100% ) per annum. - Loans repayable to related parties of the Group are secured by inventories and a mortgage bond over Clearwater Estate and carry interest of 6% (2022: 6%) per annum charged on the outstanding loan balances. The loans are not payable on demand, they are due at the end of the loan agreement.
- Lease liabilities are effectively secured as the rights to the leased assets recognised in the financial statements revert to the lessor in the event of default.
The Group did not have any debt covenants
8. | Reportable segments | P2 | |||||||||
AHL 2093 | |||||||||||
INFLATION ADJUSTED | |||||||||||
* HISTORICAL COST | |||||||||||
REVIEWED | REVIEWED | ||||||||||
Half Year | Half Year | Half Year | Half Year | ||||||||
Ended | Ended | Ended | Ended | ||||||||
All figures in ZWL'000 | 31-Mar-23 | 31-Mar-22 | 31-Mar-23 | 31-Mar-22 | |||||||
Revenue from major products | |||||||||||
Tea | 1,808,050 | 1,111,538 | 1,640,657 | 292,584 | |||||||
Macadamia nuts | 52,420 | 467,486 | 45,856 | 126,672 | |||||||
Vegetables and fruits | 234,837 | 134,894 | 191,064 | 33,934 | |||||||
Poultry | 286,155 | 383,583 | 263,263 | 95,471 | |||||||
Other | 49,940 | 51,563 | 58,775 | 11,913 | |||||||
Total | 2,431,402 | 2,149,064 | 2,199,615 | 560,574 | |||||||
All revenue is recognised at a point in time | |||||||||||
INFLATION ADJUSTED | |||||||||||
Southdown | Claremont | Kent | Corporate | ||||||||
All figures in ZWL'000 | Estates | Estate | Estate | Office | Total | ||||||
31-Mar-23 | |||||||||||
Segment revenue | 1,951,046 | - | 480,356 | - | 2,431,402 | ||||||
Segment EBITDA (excluding fair value adjustments) | (18,335,673) | 17,368,950 | 7,873,433 | (8,863,022) | (1,956,312) | ||||||
Segment depreciation and impairment | 542,959 | - | 193,577 | 259,365 | 995,901 | ||||||
Segment assets (excluding intersegment assets) | 18,513,239 | 269,469 | 3,732,351 | 3,266,534 | 25,781,593 | ||||||
Segment liabilities (excluding intersegment liabilities) | (5,604,857) | (79,110) | (647,298) | (6,352,240) | (12,683,505) | ||||||
Net segment assets/ (liabilities) | (1,473,994) | (57,306) | (51,077) | 1,582,377 | - | ||||||
31-Mar-22 | |||||||||||
Segment revenue | 1,635,307 | 10,135 | 503,622 | - | 2,149,064 | ||||||
Segment EBITDA (excluding fair value adjustments) | 48,973,924 | (9,678,045) | 8,352,112 | (48,168,593) | (520,602) | ||||||
Segment depreciation and impairment | 163,678 | 8,256 | 23,988 | 39,281 | 235,203 | ||||||
Segment assets (excluding intersegment assets) | 8,832,581 | 178,238 | 1,229,172 | 1,682,468 | 11,922,459 | ||||||
Segment liabilities (excluding intersegment liabilities) | (1,243,751) | (43,306) | (101,973) | (2,211,886) | (3,600,916) | ||||||
Net segment assets/ (liabilities) | (312,453) | (189,048) | (97,199) | 598,701 | - | ||||||
* HISTORICAL COST | |||||||||||
Southdown | Claremont | Kent | Corporate | ||||||||
All figures in ZWL'000 | Estates | Estate | Estate | Office | Total | ||||||
31-Mar-23 | |||||||||||
Segment revenue | 1,768,231 | - | 431,384 | - | 2,199,615 | ||||||
Segment EBITDA (excluding fair value adjustments) | (312,441) | 62,865 | (350,214) | (1,863,123) | (2,462,913) | ||||||
Segment depreciation and impairment | 350,946 | - | 161,068 | 229,766 | 741,780 | ||||||
Segment assets (excluding intersegment assets) | 12,939,856 | 268,776 | 2,958,345 | 2,115,956 | 18,282,933 | ||||||
Segment liabilities (excluding intersegment liabilities) | (4,998,522) | (79,110) | (647,298) | (6,352,240) | (12,077,171) | ||||||
Net segment assets/ (liabilities) | (1,473,994) | (57,306) | (51,077) | 1,582,377 | - | ||||||
31-Mar-22 | |||||||||||
Segment revenue | 432,279 | 2,234 | 126,061 | - | 560,574 | ||||||
Segment EBITDA (excluding fair value adjustments) | (36,081) | 24,809 | (33,632) | (60,163) | (105,067) | ||||||
Segment depreciation and impairment | 3,944 | 348 | 637 | 336 | 5,265 | ||||||
Segment assets (excluding intersegment assets) | 1,198,149 | 51,767 | 174,029 | 199,019 | 1,622,964 | ||||||
Segment liabilities (excluding intersegment liabilities) | (350,125) | (12,794) | (30,125) | (543,037) | (936,081) | ||||||
Net segment assets/ (liabilities) | (92,306) | (55,849) | (28,715) | 176,870 | - |
* Historical amounts have been presented as supplementary information and were not subject to an audit or review.
-
Revaluation reserve
The Group changed its accounting policy from cost model to revaluation model for two categories within its property, plant and equipment. The two categories are Buildings and leasehold improvements as well as and Plant and machinery. The revaluation was performed in a bid to fairly the state the value of the assets which had been translated at a rate of 1:1 upon change of functional currency during the financial year ended 30 September 2019. This change is effective from 30 September 2022 and has been prospectively applied in terms of IAS 8 paragraph 17.
The revaluation of buildings, leasehold improvements, plant and machinery was carried out as at 30 September 2022 (being the effective date of the revaluation) by EPG Global Real Estate, an independent valuer. The Depreciated Replacement cost has been used as a basis of valuation. This is the cost of erecting and or acquiring, installing and commissioning a new or modern substitute asset with the same or similar productive capacity as the existing one, together with associated charges directly related to the installation of the asset but excluding finance charges. The said cost is then depreciated according to age, obsolescence, use and condition. This method is applied as a last resort where it is difficult to estimate inputs required in computing fair value using the income approach. The Group's property, plant and machinery, is so specialised that there is no active markets for the assets. As such, market inputs which would be applied in the income approach, such as the market capitalisation rate of these assets could not be determined by the valuers. Therefore the Depreciated Replacement Cost has been applied. The net replacement method was used for the purposes of the revaluation.
There are no restrictions on the distribution of the Revaluation balance to shareholders.
Post year-end, there has been no change in the revaluation reserve as no revaluation exercise has been carried out in the current period.
- Currency of reporting
The Group's consolidated and condensed financial statements are presented in Zimbabwe Dollars (ZWL) which is the functional currency of all its components. - Statement of compliance
The Group's financial results have been prepared in compliance with International Accounting Standard (IAS) 34 Interim Financial Reporting promulgated by the International Accounting Standards Board (IASB), and in the manner required by the Companies and Other Business Entities Act (Chapter 24:31), and the requirements of the Zimbabwe Stock Exchange rules. - Basis of preparation
The financial results have been prepared based on statutory records which are maintained on a historical cost basis except for certain biological assets and financial instruments that are measured at fair value, and have been adjusted to fully comply with IFRS; these adjustments include restatements of financial information to reflect the effects of the application of International Accounting Standard (IAS) 29 "Financial Reporting in Hyperinflationary Economies" as more fully described on Note 13 below. - Hyperinflation
On 11 October 2019, the Public Accountants and Auditors Board (PAAB) announced that the requisite economic factors and characteristics necessary for the application of IAS 29 in Zimbabwe had been met. This pronouncement applies to reporting for financial periods ending on or after 1 July 2019.
Historical cost basis have been restated to comply with IAS 29 which requires that financial results be prepared and presented in terms of the measuring unit current at the reporting date, with comparative information being restated in the same manner. The restatements to cater for the changes in the General Purchasing Power of the Zimbabwean Dollar (ZWL) are based on indices and conversion factors derived from the Consumer Price Index (CPI) compiled by the Zimbabwe National Statistics Agency up to January 2023.
During the reporting period, the Minister of Finance and Economic Development introduced Statutory Instrument 27 of 2023: Census and Statistics (General) Notice, 2023 which states that the rate of inflation is now blended for both the Zimbabwe and United States dollars. The separate consumer price index for the Zimbabwe dollar, which is the Group's functional currency and the currency that is experiencing hyper-inflation, is no longer available. As the use of the blended consumer price index (CPI) for adjusting the Historical Cost financial results would be inappropriate, for the months of February and March, the CPIs have been estimated based on the movement in the interbank exchange rate between the United States dollar and the Zimbabwe dollar. Therefore judgement has been used in determining the CPIs due to limitation of available data.
Key CPIs and conversion factors used are shown below:
Month | CPI | Conversion Factor |
31 March 2023 | 16,133.12 | 1.00 |
Average CPI (October 2022 to March 2023) | 14,252.59 | 1.14 |
30 September 2022 | 12,713.12 | 1.27 |
March 2022 | 4,766.10 | 3.38 |
- Accounting policies
The Group has adopted all the new and revised accounting pronouncements applicable for the period ending 31 March 2023 as issued by the International Accounting Standards Board (IASB). The accounting policies adopted in the preparation of the consolidated financial statements as at 30 September 2022 have been consistently applied in these Group financial results. This interim financial report is to be read in conjunction with the 30 September 2022 annual report. - Going concern
The Directors of the Group have continued to review the financial impact of the effects of COVID-19 and the related global lockdown orders on the business . The Directors have also assessed the impact of the war between Russia and Ukraine on the business which has had a negative impact on the Group's cost of production and pricing. They have also performed an overall assessment of the ability of the Group to continue operating as a going concern by reviewing the prospects of the Group. These assessments considered the Group's financial performance for the period ended 31 March 2023, the financial position as at 31 March 2023 and the current and medium term forecasts for the Group taking into account the economic environment in Zimbabwe, climate change, the global supply chain and the expected impact on prices and demand for the Group's products. The directors believe that the Group's plans and activities adequately mitigate the risks. Based on this background, the Directors have every reason to believe that the Group has adequate resources to continue in operation for the foreseeable future. Accordingly, these financial results were prepared on a going concern basis.
16 Review Conclusion
The accompanying condensed consolidated interim financial statements of Ariston Holdings Limited for the six months to 31 March 2023 have been reviewed by PricewaterhouseCoopers Chartered Accountants (Zimbabwe) who have issued an unmodified review conclusion thereon. The review conclusion has been made available to management and those charged with governance of Ariston Holdings Limited. The engagement partner responsible for this review is Esther Antonio. The report on the review of interim financial information and the condensed consolidated interim financial statements of Ariston Holdings Limited are available for inspection at the registered offices of Ariston Holdings Limited.
17 Events after reporting date
There have been no significant events after the reporting date.
Directors: Mr. A.C. Jongwe (Chairman), Mr. P.T. Spear* (Chief Executive Officer), Mr. I. Chagonda, Mr. C.P. Conradie, Mrs.T.C. Mazingi, Mr. J.W. Riekert, Mr. Z.T. Zifamba. * Executive
Attachments
- Original Link
- Original Document
- Permalink
Disclaimer
Ariston Holdings Ltd. published this content on 11 August 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 11 August 2023 07:07:03 UTC.