- Volume up 40%
- Revenue up 57% to $25.9 million
- Operating income up $130% to $9.3 million
- Attributable income up 157% to $7.1 million
Harare- Spirits and Wine maker, African Distillers Limited (Afdis) posted revenue growth in its half year period to 31 December 2018, a robust 57% year on year growth which however, could not stop management from decrying the weakening economic environment.
Zimbabwean businesses have been suffering liquidity constraints that have impacted on operations and dividend remittances for international shareholders. Some companies have faced closure and the ones which have managed to remain resilient and posts profits have been cautioning the inflationary element in the results.
In the period under review, revenue grew to $25.9 million from $16.5 million recorded in the comparative period last year driven by a 40% volume increase complemented by a reduction in overheads as the company launched new products lines for the low-end market.
“The company posted a good set of results as it continues to enjoy growth in volumes, revenues and profits despite deteriorating macro-economic conditions. Demand remained firm but could not be fully satisfied due to severe foreign currency shortages,” Afdis managing director Cecil Gombera said in a statement accompanying the results.
Sales volumes increased by 40% compared to prior with ready to drink (RTDs) registering 55% growth followed by spirits at 25% and wines at 22%.
“Spirits continue to dominate revenue contribution accounting for 61% followed by RTDS at 29% and wines contributing the balance,” said Gombera.
Operating income increased by 130% to $9.3 million in the half year period to December 31, 2018 attributed to volume and revenue growth as well as value chain cost management.
After-tax profits for the period increased from $2.8 million in the prior contrasting period to about $7.1 million for the half year to December, 2018.
Attributable earnings per share resultantly jumped from 2.38c a share to 6.08c a share, representing a 155% increase.
This is attributable to the positive performance despite the challenging environment.
Looking at the alcohol market in Zimbabwe, analysts have hinted that Zimbabwe was trending towards cheaper spirits and value packs. However as shown by Afdis performance, ciders (which fall under RTDs) and wines have also remained resilient and experts say this is because of slowing down of imports of such products owing to foreign currency shortages.
Commenting on the groups’s business outlook, Mr Gombera said that despite the difficult trading environment, the Company remains hopeful that the national economic reform agenda will yield positive results, while in the meantime they continue focusing on business sustainability given the foreign currency scarcity.
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