Foreign currency shortages blighted a rather successful year for African Distillers Limited with the company incurring a net exchange loss of $0,36 million due to a significant foreign currency (Rand) exposure of $2,2 million.
Group Chairperson, Pearson Gowero said AFDIS produced a strong set of financial results in a challenging macro-economic environment with demand for their products remaining firm.
According to Gowero, the firm demand for their products resulted in their failure to fully satisfy market demand due to intermittent product shortages as a result of severe foreign currency constraints.
Gowero said AFDIS recorded an 18% volume increase with spirits continuing to be the major revenue contributor at 66% while Ready to Drink (RTDs), ciders and spirit coolers contributed 24% to total revenue, registered a 22% volume growth.
“All three product categories registered double digit growth in volume, with wines leading the pack at 29%,” said Gowero.
He added that the company’s balance sheet is strong with a current ratio of 2.54 compared to 2.28 in prior year and significant cash resources of $7.5 million.
“Cash generated from trading amounted to $4,8 million, a 64% increase on prior year,”noted Gowere.
Buoyed by a good agricultural season, AFDIS is looking forward to improve its performance due to expected improvement in disposable income and sufficient food supplies for the country.
“This will result in a net saving on the food import bill. It is however, likely that foreign currency shortages will continue and this will limit business growth,” noted Gowere.
