Ariston reduces costs with new solar plants

Zimbabwe Stock Exchange-listed agricultural company, Ariston Holdings Limited, has reported substantial financial savings driven by its investment in solar energy projects, which have helped reduce dependence on costly generators and their associated maintenance.

The group's largest solar investment so far is the 1.2 MW solar plant at Southdown Estate in Chipinge, installed in July 2023. This plant is connected to the Zimbabwe Electricity Transmission and Distribution Company (ZETDC) grid via a net metering arrangement, allowing Ariston to efficiently manage energy use and costs.

Several Zimbabwean corporations have embraced solar power amid ongoing power challenges, including Caledonia Mining Corporation, Schweppes Zimbabwe, Econet Wireless Zimbabwe, and Tongaat Hulett. These investments aim to reduce reliance on the national grid and maintain stable operations.

To support growing electricity demand amid economic expansion, the Government has issued multiple independent power producer licenses. Zimbabwe is also working toward becoming a net energy exporter by generating surplus electricity for export to neighbouring countries.

In its recently published 2024 annual report, Ariston's board chair, Mr Alexander Jongwe, acknowledged rising input costs for electricity, fertilisers, and crop chemicals, which negatively impacted operations. However, he said the adoption of solar power helped mitigate some of these pressures.

"Ariston Holdings Limited and all its subsidiaries continued to benefit from the positive impact of the solar energy plant installed at Southdown Estate in July 2023. This achieved cost savings through reduced reliance on generators and the associated maintenance costs, while contributing to the safeguarding of environmental resources through the use of a renewable energy source. While the solar installation reduced generator reliance, gains were partially offset by increased grid electricity tariffs," Mr Jongwe said.

Building on this success, Ariston recently announced plans to establish additional solar installations at Roscommon, Clearwater, and Kent Estates to tackle power outages and further reduce generator-related expenses.

Ariston's solar strategy mirrors a wider trend across Zimbabwe's business sector, where companies are investing in renewable energy to lessen dependence on an unreliable national grid and improve operational efficiency. This aligns with the Government's push to encourage independent power generation.

Moreover, Zimbabwe promotes investments in solar and hydro power as part of a national strategy to cut energy-related emissions by roughly one-third by 2030.

On the financial side, Mr Jongwe reported that Ariston generated revenue of US$7.066 million during the year, marking a nine percent increase from the previous year, primarily due to improved macadamia volumes and selling prices.

"However, the cost of sales worsened slightly by three percent due to increased costs of fertilisers, crop chemicals, and electricity, resulting in the group reporting a gross loss of US$1,389,028 despite improved revenue," he added.

The group's three joint ventures - Bonemarrow Investments (trading as Claremont Powerstation), Claremont Orchards Holdings, and Mombe Shoma - contributed positively to overall financial performance.

Mr Jongwe also noted that the group moved from unrealised exchange losses in the prior year, mainly from US dollar-denominated liabilities, to exchange gains from Zimbabwe Gold-denominated liabilities following a change in functional currency. Finance costs rose by 23 percent compared to the previous year.

"As a result of all the above, the group posted a 29 percent improvement in the loss for the year before other comprehensive income," he concluded.

Ariston Holdings' investment in solar energy marks a critical step in improving sustainability and financial resilience amid Zimbabwe's ongoing energy challenges.