• Volumes soared 64% year-over-year in Q3 (51% for nine months), led by 92% growth in Ready-to-Drink category from popular cider packs, alongside strong gains in affordable wines and brown spirits
• Revenue reached US$30 million for the quarter (62% increase) and US$71 million nine months to date (57% growth), supported by macroeconomic stability, mining sector activity, informal economy resilience
• Despite headwinds from contractionary monetary policy and restricted ZiG circulation elevating borrowing costs, management remains bullish on full-year prospects

Harare- AFDIS, the Zimbabwean producer of spirits, wines, and ready-to-drink (RTD) beverages, reported robust third-quarter performance amid a stabilizing economic backdrop, with volumes surging 64% year-over-year and revenue climbing 62% to US$30 million, fuelled by festive-season demand and supportive sectoral tailwinds.

This marks a continuation of strong momentum, with nine-month volumes up 51% and revenue reaching US$71 million (57% growth), positioning the company well for the remainder of its financial year ending March 2026.

The trading environment in Q3 featured relative stability in inflation and exchange rates, enabling effective business planning and inventory management. Zimbabwe's tight monetary policy characterized by a 35% policy rate, elevated corporate lending rates around 40-46%, and measures to restrict ZiG (Zimbabwe Gold) circulation has successfully anchored inflation expectations, reduced speculative pressures, and supported ZiG stability around ZiG 26 per USD and 25 per USD in January 2026.

This contractionary stance, while necessary to combat past hyperinflationary risks and build credibility after ZiG introduction, has imposed headwinds through higher borrowing costs and limited credit availability for working capital and expansion.

Businesses like AFDIS are facing impeded access to affordable financing, potentially constraining investment and broader economic momentum despite the stability dividend that allowed reliable forecasting and distribution optimization.

Offsetting these monetary constraints, growth was powerfully propelled by heightened consumer spending originating from the mining sector (4.6 billion in 2025), the informal economy (65%), and diaspora remittances (over 2 billion in 2025).

Mining, buoyed by record global gold prices and domestic production, has injected foreign currency earnings and income into households and supply chains, directly lifting discretionary spending on affordable alcoholic beverages. The informal sector, which accounts for a substantial share of employment (over 60%) and GDP contribution (up to 54% in recent estimates), operates largely in cash and provides flexible livelihoods that translate into resilient consumer demand even under formal credit tightness.

Complementing this, diaspora remittances have surged dramatically and potentially topping US$2.45 billion for the full year serving as a critical lifeline for household consumption, retail activity, and small-business expansion while bolstering foreign-currency liquidity. These inflows have cushioned families against residual inflationary pressures and amplified spending power in both urban and rural markets, directly benefiting categories positioned at accessible price points.

Regulatory enforcement against smuggled and counterfeit products further amplified industry tailwinds, creating a more level playing field for legitimate manufacturers. Authorities intensified border controls, raids, and penalties on illicit alcohol (including counterfeit whiskeys and other spirits), reducing unfair competition from cheaper, untaxed imports that previously eroded formal market share and posed health risks.

This crackdown has supported local production volumes and pricing power, as consumers shift toward verified, quality-assured products from established players like AFDIS, particularly in a market historically plagued by cross-border smuggling from neighbours.

Category performance underscored targeted consumer preferences.

The RTD segment exploded 92% on firm demand for cider packs, appealing to festive, value-conscious buyers; wine grew 49% via its affordable range; and spirits advanced 30%, anchored by brown spirits that resonate with traditional and premiumising tastes. Improved product availability across independent trade channels translated volume strength into outsized revenue gains, reflecting favourable mix and pricing discipline.

Management remains optimistic for the balance of the year, citing ongoing opportunities from mining, construction, agriculture, and remittances, alongside sustained anti-illicit measures that favour local manufacturing.

Strategic investments, including an US$8 million additional packaging line, will expand capacity to meet rising demand and support market-share gains through efficient distribution and cost controls. This capital expenditure addresses prior supply constraints and positions AFDIS to capitalize on projected broader economic rebound (Zimbabwe GDP growth estimated at 6.6% for 2025).

Projecting year-end results for the fiscal year ending 31 March 2026, the nine-month revenue base of US$71 million (versus approximately US$45.2 million prior year) already embeds 57% growth, with Q3 delivering 62% revenue expansion on 64% volume uplift. Prior full-year (ended March 2025) revenue stood at US$59.7 million.

Assuming Q4 (January-March 2026) sustains momentum, albeit potentially moderating from festive peaks to 45-55% growth over the prior Q4 of roughly US$14.5 million, factoring in capacity enhancements, continued sectoral drivers, and anti-illicit benefits, the company is poised for full-year revenue of approximately US$92-95 million.

This implies 54-59% year-over-year growth, outpacing the prior year's 15% expansion and reflecting compounded quarterly strength, operational leverage from distribution gains, and margin enhancement potential via scale and cost discipline.

Risks include persistent high borrowing costs or external shocks, but the combination of macroeconomic stabilization, illicit trade curbs, and targeted investments tilts the outlook favourably toward sustained profitable growth.

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