• Tobacco Sales Floor handled 81 mn kg (up 56%) driving group-wide volume growth across logistics, agric inputs and packaging
• Revenue rose 24% to US$45.6 mn, profit from continuing operations surged 85% to US$10.5 mn, EPS up 212% to 2.91 US cents
• Balance sheet strengthened markedly with cash reserves up fivefold to US$8.6 mn, gearing down to 13%, equity up 11% to US$68.4 mn

Harare- Zimbabwe's ZSE-listed TSL Limited, the diversified group focusing on tobacco marketplace services, end-to-end logistics, agricultural inputs, packaging and property infrastructure, has seen a robust FY25.

The group reported revenue from continuing operations of US$45.6 million (up 24%), EBITDA of US$19.3 million (up 70%), and profit from continuing operations of US$10.5 million (up 85%). Average selling prices held firm at US$3.32 per kilogram despite a 3% decline year-on-year, highlighting volume as the primary growth driver amid a successful summer cropping season and expanded grower participation.

This performance highlights TSL’s pivotal role in Zimbabwe’s tobacco value chain, from sales floors and logistics to agricultural inputs and infrastructure. The results reflect effective cost management, operational scaling, and strategic diversification, positioning the group to capitalize on projected further tobacco growth while mitigating sector-specific risks like weather variability and informal competition.

Revenue growth of 24% stemmed primarily from higher volumes across business units, complemented by cost optimization initiatives. EBITDA rose sharply to US$19.3 million, reflecting improved margins, while net profit surged 85% to US$10.5 million. Additional boosts came from fair value gains on the investment property portfolio and profits from asset disposals.

The balance sheet strengthened markedly. Total assets grew 11% to US$99.4 million, shareholders’ equity increased 11% to US$68.4 million, and the gearing ratio improved from 18% to 13%.

Operating cash flows remained positive, with cash reserves expanding fivefold to US$8.6 million, enhancing liquidity and financial resilience in a challenging macroeconomic environment characterized by delayed rains and competition.

These metrics indicate disciplined treasury and cost management, reducing leverage while building cash buffers to support expansion and weather sector volatility.

Packaging unit benefited directly from the larger national tobacco crop. Hessian hire volumes rose 26%, driven by strong demand for locally coated paper products, though tobacco paper volumes fell 6% due to lower exports. The unit delivered solid results overall.

Agricura faced headwinds from delayed rains, intense informal sector competition, and volume pressures in generics (insecticides -34%, herbicides -35%). Offsetting this, targeted growth occurred in higher-value segments like fungicides +167% (aided by four new product introductions), fertilizers +137% (low margins), and animal health remedies +220% following the November 2024 commissioning of the animal health plant.

Management responded with branch/staff rationalisation, product mix optimisation, and debt reduction, demonstrating agility in preserving profitability despite uneven volume trends.

Tobacco Sales Floor delivered standout results, handling 81 million kilograms (up 56% from 52 million kg), across sales floors in Harare, Mvurwi, Karoi, and Marondera. Growth was supported by the bumper crop, higher grower participation, strong merchant engagement on auction and contract platforms, new business wins, and decentralization strategy.

Process automation yielded 10% cost savings by aligning staffing with activity levels.

However, on the commodity exchange, trading remained subdued, with warehouse receipts value up modestly 2% to US$77.6 million (195,082 metric tonnes vs. 192,265 prior year). Secured US$23 million in trade finance pledges to improve liquidity and support future volume growth among farmers, traders, and off-takers.

End-to-End Logistics’ performance improved markedly on the back of the tobacco boom and new bonded warehouse capacity. Forwarding volumes surged 107% (fertilizer clearances prominent), general warehouse utilization reached 91% (from 88%), and forklift hours rose 11% amid higher FMCG and tobacco throughput. Green tobacco bale handling increased 52%.

Offsetting factors included a 68% decline in port full-lift volumes due to reduced rail movements and lower container flows, highlighting infrastructure bottlenecks outside TSL’s direct control.

Rental income from third-party tenants grew 51%, driven by full-year contribution from 15,000 sqm of new warehouse space added previously, plus rental escalations. Occupancy held steady at 87%, with net yields flat at 10%. Total lettable space dipped 3% to 213,000 sqm after two property disposals.

Construction resumed in Q4 2025 on an 8,000 sqm modern warehouse at Hubert Fox Complex in Harare, already tenanted and slated for completion next year.

TSL exited two non-core businesses (car rental and farming), with most assets disposed and remaining closure activities expected to finalize by 31 October 2026. This refocuses resources on core competencies.

The board declared a special cash dividend of US$1.2927 cents per share (US$4.8 million total, paid 3 November 2025) covering the prior year’s foregone dividend plus proceeds from property disposals. A final dividend of US$0.742 cents per share for FY2025 was declared on 27 January 2026.

Looking ahead, management is cautiously optimistic, citing dependence on economic conditions, rainfall, and barn curing capacity. TIMB data shows irrigated tobacco area up 22% to ~24,000 hectares and total planted area up 22% to 113,536 hectares, with increased farmer participation suggesting potential for sustained or higher volumes, subject to weather outcomes.

Strategic priorities include operational efficiencies, technology optimization, disciplined cost/treasury management, and growth initiatives: development of a 73-hectare Harare South land bank starting Q2 FY2026 (targeting ~1,900 residential stands plus commercial/community amenities), nationwide Agricura branch refurbishment/modernization, warehouse expansions, and operationalization of the Rutenga multimodal inland port following regulatory approvals. These moves aim to diversify revenue while deepening tobacco ecosystem integration.

Analytical Perspective

TSL’s FY2025 results demonstrate resilience and leverage of the record tobacco season, with volume growth across core units (TSF +56%, forwarding +107%, select Agricura segments) outweighing price softness and segment-specific pressures. Cost discipline, automation, and asset disposals enhanced profitability and liquidity, while property contributions provided stability.

Key risks remain: climatic variability (delayed rains noted), informal competition eroding agricura generics, subdued commodity trading, and external logistics constraints (rail/container declines). Opportunities lie in irrigated tobacco expansion, land/property development for non-tobacco revenue, and enhanced trade finance/warehouse capacity to boost liquidity and volumes.

Overall, TSL appears well-positioned for sustainable growth in Zimbabwe’s vital tobacco industry, balancing short-term operational wins with longer-term infrastructure and diversification investments.

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