Despite enduring massive disruptions to its supply chain during the COVID-19 restrictions effected during the just ended financial year to March 2021, Delta Corporation Limited managed to post earnings before interest and tax of ZWL$ 10.7 billion, signifying a 32 percent growth from pre-pandemic prior year levels.
The strong performance was due to volume recovery, inflation driven stock holding gains and tighter cost management, the Group said
The Group remained cash generative closing the year with a net funding of ZW$1,3 billion and declared a final dividend of ZW$105 cents per share to be paid on 06 July 2021 bringing the total dividend for the year to ZW$150 cents per share.
The Group foreign currency exposure from legacy debt arrangement reduced to US$18,8 million.
Capital expenditure of ZW$2,2 billion was below planned replacement levels due to foreign currency constraints at the front end of the year. This includes the acquisition of the bottling assets of Mutare Bottling Company.
Lager beer volume grew by 17 percent compared to prior year. The volume recovery was mostly during the second and third quarters following the relaxation of the COVID-19 restrictions.
“The Group adopted strategies to stimulate demand through competitive pricing in an environment of weak consumer demand and currency related distortions in value chain costs,”
“There are ongoing efforts to inject additional glass bottles to drive volume and enhance consumer choice of brand and pack,” the Group said.
In Zimbabwe, the sorghum beer volume declined by 7 percent compared to prior year, reflecting a notable recovery in the second half of the year.
“The sector was adversely affected by the limited access to key trade channels such as bars, beer halls and bottle stores which were closed during most phases of lockdowns. The business relied on imported maize for most of the year,” said Delta.
In contrast, Sorghum beer volume at Natbrew Plc (Zambia) grew by 6 percent over last year despite facing stiff competition from illegal trading in bulk beer in addition to the cost pressures arising from the escalation in the cost of imported materials due to the depreciation of the Kwacha.
Sparkling beverages volume grew by 33 percent over last year, albeit from a low base.
“There were some constraints in the supply of key raw materials such as sugar and carbon dioxide which affected market supply during the period under review,’ said Delta.
At African Distillers, volumes grew by 31 percent compared to the prior year, driven by the spirits and ready to drink categories.
Schweppes Holdings Africa’s volume was 1 percent below prior year indicating a notable recovery in main line crushes and syrups and the benefits from the re-launch of the Minute Maid Juice drinks.
The Group is pinning its hopes of recovery on the easing of the lockdown restrictions across the region which is expected to rekindle economic activity and consumer spending.