The overall expenses of Tshs 921 million were within the budgeted amount of Tshs 1 billion which translates to a favourable variance of 11%
The Trading Divisions overall performance was a net contribution of Tshs 221 million and short of the budgeted amount by 9%.
The Property Division recorded a surplus of Tshs 377million which was 45% above budget mainly due to the effects of gains in exchange rates and the near full letting of TFA-ASC.
The revised budget which has been circulated to all units has the following main features:-
Sales have been revised downwards by 41% to Tshs 6 billion mainly due to the fact that the anticipated level of sales particularly fertilizers and seeds shall not be achieved. Iringa and Njombe branches have had the most reduction with 69% and 80% reduction from original budget respectively.
The trading margins have been revised from 13% to 16% on the assumption that fertilizers sales which have lower margins shall not dominate the sales mix in the remaining half of the financial year. As a result of the anticipated lower sales, the trading net profit is expected to drop from the original budget of Tshs 734m to Tshs 271m.
Property Division rental revenue and the net profit are expected to increase marginally from Tshs 982m to Tshs 1bn/= and Tshs 530m to Tshs 677m respectively.
Total overheads are projected to decrease by 6% to Tshs 1.9 b on account of reduced sales activity and cost controls.
Resulting from the downward revised projected sales and overhead cost reductions, the net profit is expected to drop from Tshs 198m/= in the original budget to Tshs 11m/=
The ICT Department is being prepared for the Wide Area Network (WAN) branch connections through training.
The sale of none core landed properties has now been concluded with the sale of the Oldeani Depot and Mbozi Plot.
Meanwhile efforts to raise working capital and development finance are continuing and we are discussing these with several financial houses.