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Thursday, September 29, 2022
HomeBusinessDelta Q1 Volumes Surge On Forex Availability From Local Sales

Delta Q1 Volumes Surge On Forex Availability From Local Sales

Alcoholic beverages maker-Delta Corporation recorded increased volumes during the first quarter to June 2022 largely spurred by availability of foreign currency to import raw materials and drive production.

Despite a general shortage in foreign currency to adequately meet import demand for raw materials, most firms have been witnessing an improvement in supply due to the growing foreign currency sales as the economy is fast dollarizing.

In its Q1 trading update, the group was mainly pleased with the local units performance while its Zambian subsidiary volumes tumbled although the South African unit continued to gradually strengthen.

The lager beer volume grew by 19% for the quarter compared to prior year. The volume recovery is underpinned by improved supply of brands and packs which has benefited from the injection of returnable glass.

The Sorghum beer volume in Zimbabwe grew by 14% for the quarter compared to prior year, driven by the standard Chibuku (Scud) product.

The volume at Natbrew Zambia remains under pressure, declining 9% for quarter, in the aftermath of the price increases implemented in January 2022 in response to the hike in excise duty.

“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,” said the company.

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The Sparkling Beverages volume grew by 32% for the quarter and continues to recover market share. The category has benefited from consistent product supply and an expanded pack and flavour offering although it continues to be affected by currency related pricing distortions.

The volume at African Distillers Limited (Afdis) grew by 18% for the quarter. The supply of ciders has since stabilized, after the outage of glass bottles in the last quarter.

Schweppes Holdings Africa Limited recorded a volume growth of 9% for the quarter, which was constrained by a shortage of fruit juices for the flagship Mazoe Orange Crush. The local supply of fruit juices has resumed as the harvesting season commenced in June 2022.

To curb the intermittent supply gaps arising from the limited packaging capacity, the group has undertaken the development of a new Chibuku Super plant to be installed early next year.

Meanwhile, group revenue grew by 55% for the quarter in inflation adjusted terms compared to growth of 283% in historical cost terms.

“This reflects the volume growth and the replacement cost-based pricing,” said the company.

It however said despite Zimbabwean entities continuing to generate sufficient foreign currency through domestic sales, there are concerns about the increased policy risks given the frequent legislative changes in this area.

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