- Lager beer volumes went up by 19%
- Sorghum beer volumes grew by 14%
- Revenue soared by 55%
Harare- ZSE-listed beverages maker, Delta Corporation Limited has recorded volumes growth across all its units during the first quarter ended 30 June 2022 despite an economic environment curtailed by exchange rate volatilities and growing inflation.
This, resulted in the revenue for the Group to soar by 55% ahead of the same comparative period in 2021.
However, the Group said policy inconsistency regarding currency of payment remains a major concern as it creates significant uncertainties and risks.
“Whilst the Zimbabwean entities continue to generate sufficient foreign currency through domestic sales, there are concerns about the increased policy risks given the frequent legislative changes in this area,” the Group said in a statement accompanying the trading update.
“The disparities in the exchange rate prevailing in Zimbabwe and lack of clarity in the legislation relating to currency of payment of certain taxes creates significant uncertainties and business risks.”
Meanwhile, lager beer volume grew by 19% ahead of 2021’s first quarter underpinned by an improved supply of brands and packs which has benefitted from the injection of returnable glass. However, there are intermittent supply gaps arising from the limited packaging capacity ahead of the installation of a new plant in early 2023.
Zimbabwe’s sorghum beer volume grew by 14% for the quarter driven by the standard Chibuku product. The category continues to benefit from the increased social activities as the Group celebrates the Chibuku brand’s 60th anniversary.
However, Chibuku Super is constrained by the limited production capacity. A new Chibuku Super plant is being installed at Harare brewery for commissioning in early 2023 and there is renewed focus on expanding consumer choice.
United National Breweries South Africa recorded a volume growth of 13% for the quarter despite the setbacks from the adverse weather in some markets while progress is being made in accessing additional market channels, new products and pack innovations and winning consumers from home brews according to the Group.
Volume at Natbrew Zambia remained under pressure, declining 9% for the quarter, in the aftermath of the price increases implemented in January 2022 in response to the hike in excise duty but, the Group said there are signs of recovery, which will be assisted by the broadening of the product offering, revamping of the route to market and exports of Chibuku Super into the region.
The Sparkling Beverages volume grew by 32% for the quarter while the range of no sugar variants has been expanded to include Coke, Fanta, Sprite and Sparletta Ginger beer brands.
“The category has benefitted from consistent product supply and an expanded pack and flavour offering but the category is affected by currency-related pricing distortions,” the Group added.
Wines and spirits volume at Afdis went up 18% as the supply of ciders stabilised, after the outage of glass bottles in the last quarter. The business continues to benefit from the local production of some key brands.
Schweppes Holdings Africa Limited recorded an increase in volumes of 9% for the quarter. Despite the growth, volumes were constrained by a shortage of fruit juices for the flagship Mazoe Orange Crush.
“The business remains poised to exploit opportunities from activities that generate aggregate demand such as the infrastructure development projects, mining activities and diaspora remittances while the Group is undertaking an ambitious recapitalisation programme to address the capacity gaps and improve customer service.”
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