African Distillers Limited has pinned hopes on the forthcoming elections and relaxed COVID-19 restrictions among other factors to push sales volumes of its wines, spirits and ready-to drink beverages.
In its half-year ending 30 September results, AFDIS bemoaned the challenging operating environment worsened by incessant power outages, rising inflation and high interest rates among other challenges.
“The trading environment for the period under review was challenging, characterised by rising inflation, high interest rates and supply chain disruptions. The government introduced initiatives to reduce ZW$ liquidity and stabilise the exchange rate in the last quarter. The reduction in ZW$ liquidity resulted in the softening of demand for goods and services in supermarkets whilst increasing US dollar transactions in general trade,” said AFDIS Chairman Matlhogonolo Valela.
Despite the challenges highlighted, AFDIS recorded volume growth of 11 percent compared to prior year.
“The Company recorded a volume growth of 11% compared to prior year. Wine volume grew by 24% driven by improved availability and affordability of some brands which are now packaged locally. Spirit and Ready to Drink (“RTD”) volumes grew by 9% and 11% respectively driven by renewed focus on direct sales distribution,” added Valela.
In terms of revenue, AFDIS recorded ZW$14.9 Billion, 48 percent up from ZW$10 Billion in the prior year while operating income also increased by 128 percent to ZW$2 Billion on the back of higher volume and favourable mix among other factors.
“In inflation adjusted terms, revenue increased by 48% to ZW$14.9 billion whilst operating income increased by 128% to ZW$2.0 billion. In historic cost terms, revenue increased by 369% to ZW$11.4 billion whilst operating income increased by 463% to ZW$2.7 billion,” said Valela.
AFDIS has since recommended an interim dividend of US$0.0025 per share, amounting to US$299 000.