HARARE – The country’s biggest beverages producer, Delta Corporation said on Thursday its half-year revenue surged 37 percent on the back of firm consumer demand, but cautioned the recently introduced “two cents on every dollar” tax had dampened business confidence.
The group declared an interim dividend of 2.5 cents per share.
“The growth in revenue has positively impacted on profitability and cash flows,” the company said in a trading update for the six months ending 30 September.
Shortages of foreign currency continued to impact on production and availability of packaging materials.
“Consumer demand has been firm due to increased economic activity in mining and agriculture, expansionary fiscal and monetary policies and the election related spending,” Delta said.
“The company has maintained stable retail prices since 2013.”
In the period, Delta recorded a 52 percent jump in lager beer volumes compared to the same period last year.
“The business has responded well to the surge in demand, with volume outturn surpassing historical peaks. There are some frictional shortages of brands and packs occasioned by the limited production capacity and raw material supply issues,” the Zimbabwe Stock Exchange listed firm said.
Sorghum beer and soft drinks sales were up nine and three percent respectively.
“The category (soft drinks) was adversely affected by the challenges in securing imported raw materials, leading to extended periods of production stoppages and out of stock situations,” Delta said.
Absence of some of its famous soft drinks brands has been noticeable in the market.
Turning to the new tax introduced last week on electronic transactions, Delta said government must in future engage stakeholders first ahead of major policy pronouncements to maintain market confidence.
“The two percent transaction tax took both business and consumers by surprise, raising policy risks and undermining market confidence,” the firm said.
Government has since said the tax, despite criticism by some in the market, was staying as it was meant to widen its revenue base and aid its attempts to cut borrowings to finance its expenditure. – New Ziana