Currency changes impact on Delta’s performance

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    Harare – Delta Corporation Limited has reported a subdued performance for the first quarter (Q1) to June 2019 highlighted by a 57% decline in larger beer volumes compared to prior year performance.

    The Company said demand was subdued on account of affordability issues as market players adopted varied pricing models which are reflectively in line with the rising inflation and exchange rates.

    Zimbabwe is currently going through a major economic meltdown coupled with foreign currency shortages and depreciation in the value of the local currency.

    Government over the course of the current year implemented some monetary policy changes the latest highlight being the introduction of Statutory Instrument (SI) 142 of 2019 which effectively banned the use of multi currencies and established the Zimbabwe dollar as the sole legal currency.

    On introducing these policies, government said it is aimed at tackling inflation and stabilising exchange rates, however, both remain on an upward trajectory whilst availability of foreign currency on the interbank remains inadequate for producers.

    “The fundamental changes in the economy arising from the recent fiscal and monetary policies have significantly affected the business,” Delta’s secretary A Makamure said in a statement accompanying the trading update.

    “The availability of foreign currency remains a challenge, disrupting imported supplies into the value chain,” he added.

    The Company reported a 2% growth in the Sorghum beer volumes against Q1 2018, highlighting that product supply has been consistent despite the difficulties in accessing imported packaging materials and services.

    Further to the report, the Company expressed concerns about the supply of agricultural cereals arising from the drought and the recent changes to the marketing policies.

    In the period under review, the sparkling beverages volume declined by 79%.

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