STSL Limited is strategically positioning itself to seize emerging opportunities as part of its growth plan, with a key focus on restructuring its balance sheet.
The company is in the final stages of acquiring a 51.43% stake in Nampak Zimbabwe from Nampak Southern Africa Holdings for $25 million.
Group chairman Antony Mandiwanza, in the financial report for the year ending October 31, 2024, stated that the sale and purchase agreement is nearing completion, with multiple strategic initiatives expected to conclude before the financial year’s end.
For the reporting period, revenue from continuing operations reached $36.9 million, marking a 1% increase from the previous year.
Most business units met their targets, except Agricura, which faced setbacks due to anticipated drought conditions in early 2023/24.
The group’s EBITDA declined by 5% due to the transition to US dollar-based financial reporting.
Profitability was impacted by increased operating costs, largely driven by dollarization and rising inflation.
As a result, profit before tax from continuing operations fell to $7.1 million from $9.8 million in the prior year. Despite this decline, STSL maintained a strong financial position.
Tobacco and Packaging Performance
In the tobacco services sector, STSL maintained its processing volume at 52 million kilograms, despite a 22% decline in Zimbabwe’s overall tobacco crop.
Tobacco Sales Floor strengthened its relationships with merchants, handling 44 million kilograms of contract tobacco, reflecting a 13% year-on-year increase.
Infrastructure at decentralised tobacco floors in Karoi, Mvurwi, and Marondera was expanded and upgraded to enhance efficiency for both farmers and merchants.
Propak Paper saw a 52% surge in volumes, securing a 70% share of the national tobacco paper market.
However, hessian volumes dropped by 16%, reflecting the overall decline in national tobacco output.
STSL is now focusing on increasing exports of tobacco paper and hessian within the region.
Agricultural Sector and Market Trends
Agricultural trading was the most affected segment due to El Niño-induced drought, leading to reduced production of key crops such as maize, tobacco, wheat, and soybeans.
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Competition from new players also intensified. Despite these challenges, STSL improved its gross profit margin from 38% to 49%, supported by a premium product mix and strategic procurement.
The company also advanced its commitment to sustainable agriculture by introducing three biological products: B-Veria, PL Nema, and Tricho-Tag.
Additionally, the upgrade of its Animal Health Plant was completed in preparation for Good Manufacturing Practice (GMP) certification, with capacity to meet national demand for livestock dewormers.
Logistics and Supply Chain Developments
The group’s logistics division recorded growth, aided by a revised business model that provides end-to-end support for customers.
General cargo handling saw an increase, particularly due to fertiliser shipments processed through the Beira corridor and stored at the Mutare facility.
However, storage volumes remained low as businesses adopted just-in-time inventory strategies.
Tobacco handling volumes dropped by 5% due to the national decline in production, but FMCG distribution surged by 27%, driven by expanding partnerships with existing clients.
The Ports business recorded a 33% increase, fuelled by strong performance from strategic partnerships. Conversely, clearing operations declined by 27% due to reduced shipment volumes, as major clients grappled with global supply chain disruptions.
Warehouse capacity saw a modest 3% expansion from 2023 into 2024, with further growth anticipated in 2025. Meanwhile, Premier Forklift operations grew significantly, with service hours rising by 27% and forklift sales surpassing the previous year’s figures.
STSL remains committed to optimising its operations, capitalising on growth opportunities, and reinforcing its financial stability as it moves forward with its expansion plans.
