Zimbabwe’s largest brewery, Delta Corporation, posted a 77 percent jump in profit to $57,2 million from the $32,3 million recorded prior year comparative on the back of revenue and volume growth for lager beer in particular.
Basic earnings per share amounted to 4,63 cents up from 2,64 cents prior year and from the earnings the beverages giant declared a second interim dividend per share of 2,5 cents to bring the total for the half year to 4,5 cents.
Delta is sitting on a cash pile of $302 million with $53 million still to be remitted to foreign shareholders, while foreign suppliers are owed $41 million,.
The group’s revenue steadily rose by 37 percent to $341,4 million in the period under review from $250 million recorded previously whereas operating income was $28 million higher than $38 million recorded in prior year comparative which is a 73 percent growth.
This outstanding performance is attributable to impressive growth in volumes of lager and sorghum beer which grew by 54 and two percent respectively whilst sparkling beverages grew by just three percent.
Management said the lager beer volumes out turn of 1,040 million litres was the highest since 2013 when volumes reached 1,027 million litres, this is despite the company experiencing supply constraints as a results of foreign currency shortages to import packaging material and other key raw materials. Major shareholder AB InBev was however said to be supportive in securing imported materials.
Delta’s associates African Distillers performed satisfactorily in terms of volumes and financial performance whereas Schweppes witnessed growth in volumes despite periodic outages of raw materials.
Pearson Gowero, Delta Corporation Limited’s chief executive officer highlighted that sorghum beer volumes grew by two percent (after being negative in in the first quarter) owing to a remarkable 41 percent surge in sales of Chibuku Super beer mainly due to growth in economic and the just ended plebiscite related activity.
However, currency shortages led to a suppressed capacity of traditional and lager beer volumes.
“Consumer demand has been firm due to improved economic activity in mining, agriculture and election related spending.
However, outages of important raw materials arising from limited hard currency led to a constrained capacity in lager and Chibuku Super beer,” said Gowero.
Gowero stressed that his company had not scaled down operations in any way but instead lamented over market turbulences which have led to an array of challenges in the beverage business dating back from early October this year.
“Market disturbances since October affected business confidence leading to spike in demand, disruptions of delivery schedule due to fuel supply and distorted value perceptions multi-tier pricing which undoubtedly hurt customers.
“Panic buying by our customers emptied shelves particularly of local products and we have struggled since then to keep our market fully supplied not that we have scaled down anything in fact our capacity is stretched to the limit,” said Gowero.
In the outlook the company looks forward to address product supply challenges in the context of emerging trading environment.