Delta reports revenue growth, cautions impact of inflationary pressures

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• Q4 and FY20 revenue grew by 20% and 14% respectively in inflation adjusted terms
• The Group cautions disruptive impact of hyperinflation, multiple exchange rates and rapid changes in the policies
• Volume performance subdued in part due to the impact of COVID-19

Harare – Delta Corporation Limited on Thursday issued a trading update for the fourth quarter and full year to 31 March 2020. The revenue for Q4 2020 grew by 20% in inflation adjusted terms driven by the replacement driven product pricing and a low prior year base.

Revenue for the full year grew by 14% compared to the average inflation of 363%.

Commenting on the performance, the Group stated, “The Directors remind readers that there are significant challenges in ascertaining the underlying business performance in an environment of hyperinflation, multiple exchange rates and rapid changes in the policies.”

During the later part of the quarter, business operations were severely impacted by the restrictions to human and economic activity in response to the advent of the novel coronavirus (COVID-19) pandemic.

This has impacted Delta’s operations including channels of distribution which drive the consumption of its beverages.

Lager beer volume declined by 27% in Q4 2020 and 42% for the full year compared to the prior comparative period.

Meanwhile, the company continued prioritization of returnable bottle packs in an effort to conserve foreign currency and drive affordability.

Sorghum beer volumes in Zimbabwe declined by 27% for the fourth quarter and 25% for the full year. At Natbrew Zambia, the volume was 37% down in Q4 and 27% for FY2020.

Meanwhile, sparkling beverages volume grew by 368% for the quarter off a low base in 2019 when the business was virtually closed. However, the volume declined by 17% for the full year.

“The business continues to work collaboratively with the Coca-Cola Company to maintain consistent product supply whilst optimizing the value chain and product offerings.

Elsewhere, total volumes at African Distillers (Afdis) declined by 12% for the quarter, whilst the unit also benefited from a favourable product mix.

Likewise, the beverages volume at Schweppes Holdings declined by 24% for the quarter due to low consumer demand.

Zimbabwe continues to be gripped a number of economic challenges such as limited availability of foreign currency, shortages of raw materials for production, fuel shortages which in addition to the impact of COVID-19 will impact paints a gloomy outlook for business operations for at least throughout the course of this year.

Delta confirmed that the full year financial results are expected to be published by 30 May 2020.

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