Delta full-year profit 13% down, lager volumes tumble

Business
Delta Corporation’s profit after tax plunged 13% to $92,8 million in the full- year ended March 31 2015 due to decline in revenue.

Delta Corporation’s profit after tax plunged 13% to $92,8 million in the full- year ended March  31 2015 due to decline in revenue.

BY MTHANDAZO NYONI

Delta, the largest counter on the local bourse accounting for a third of market capitalization, said on Wednesday revenue was down 4% to $576,6 million on prior year reflecting effects of lower sales value and volume in both lager beer and sparkling beverages.

Operating income declined 14% to $111,1 million while earnings before interest depreciation tax and amortisation was down 10% to $143,2 million.

Lager beer volume was down 17% on prior year.

The company said rate of decline decelerated in the last half of the year following price reductions that improved the affordability of Delta brands.

Delta said it was appealing to the government to review excise duty to help boost volumes.

Soft drinks volume comprising both sparkling and alternative beverages was down 6% on prior year.

“The slowdown in the economy resulted in a very difficult trading year. Consumer spending declined significantly.

The company continued to focus on taking measures to capture value and retain consumers in portfolio of beverages while expanding and maintaining facilities for future recovery. The weakening regional currencies have made this more challenging,” the company said.

Maheu juice and dairy mix beverages were up 11% for the year.

This category, according to the company, is expected to benefit from additional production capacity commissioned in October 2014, rehashed shumba maheu packaging and the continued rollout of additional flavours.

Sorghum beer was up 8% from prior year driven by Chibuku Super innovation and investment, the company said.

“The supply of Chibuku Super improved in the last quarter of the year with the brand attaining a 50% contribution by March 2015.

The new Chibuku Super production facility in Bulawayo is scheduled for commissioning by July 2015, which will assist in closing the supply gaps,” the company said.

Despite recording decline in profit, the company declared a final dividend of $2,30 cents per share.

Going forward, the company said it would remain focused on delivering value to stakeholders by optimising operations and product innovations.