E-Malt.com News article: Zimbabwe: Delta Corporation’s attributable income declines by 7% in H1 2014

Beverage maker Delta Corporation’s attributable income for the last six months to September was down seven percent to $44 million as the group seeks to commission two sorghum beer plants to boost the group’s revenue after lager beer sales fell on weakening demand, zimeye.com reported on November 13.

Larger beer volumes for the period were down 25 percent to 69.5 million litres on the back of an underperforming economy, group chief executive, Pearson Gowero, told journalists and analysts on November 12. Half-year lager volumes have come off a post-dollarisation peak of just over 100 million litres registered during the 2013 financial year.

Revenue was down four percent to $302 million for the half year to September 30 on depressed consumer spending.

“Consumer spend is softening and largely chasing lower priced goods and services,” the company said in a statement accompanying its results on November 12.

Operating income decreased by nine percent to $57 million while earnings before interest, taxes, depreciation and amortisation was down four percent to $ 74.4 million.

Investment activities to maintain and expand operations decreased by 52 percent to $ 13.6 million

Lager beer was 25 percent down on prior year attributed to the decline in consumer spending with the company appealing to government for a review in excise duty. Sales were down 15 percent to $139 million while sorghum beer sales advanced 24 percent to $94 million.

Group finance director Matts Valela said during the period under review, the group closed six breweries as it focused on opening two Chibuku Super plants by June 2015.

“The company remains engaged with the fiscal authorities to reduce excise duty levels to augment the interventions implemented recently to address affordability and reverse this undesirable trend,” said the company.

Sparkling and non alcoholic beverages were down nine percent on prior year while alternative beverages are up 16 percent on prior year.

Sorghum beer continued to record growth and was up 14 percent on prior year driven by affordability with the Chibuku super brand driving overall category performance.

Going forward, the company said it anticipates the business environment remaining difficult, while focus will be on capturing consumer spend and containing costs.

The board has declared an interim dividend of $1.35 cents per share to be paid to shareholders on 10 December 2014.


14 November, 2014