HARARE – Beverage maker Delta Corporation attributable income for the six months to September was down 7% to $44 million as the group seeks to commission two sorghum beer plants to boost the group’s revenue after lager beer sales fell on weakening demand.
Lager beer volumes for the period were down 25% to 69,5 million litres on the back of an under-performing economy, group chief executive Pearson Gowero told journalists and analysts on Wednesday.
Half-year lager volumes have come off a post-dollarisation peak of just over 100 million litres registered during the 2013 financial year.
Delta said it was appealing to the government to review excise duty to help boost volumes.
Revenue was down 4% to $302 million to September 30 on depressed consumer spending.
“Consumer spend is softening and largely chasing lower priced goods and services,” the company said in a statement accompanying its results on Wednesday.
Operating income decreased by 9% to $57 million while earnings before interest, taxes, depreciation and amortisation was down four percent to $ 74,4 million.
Investment activities to maintain and expand operations decreased by 52% to $ 13,6 million Clear beer sales were down 15% to $139 million while sorghum beer sales advanced 24% to $94 million.
- Chamisa under fire over US$120K donation
- Mavhunga puts DeMbare into Chibuku quarterfinals
- Pension funds bet on Cabora Bassa oilfields
- Councils defy govt fire tender directive
Keep Reading
Group finance director Matts Valela said during the period under review, the group closed six breweries as it focused on opening two Chibuku Super plants by June 2015.
“The company remains engaged with the fiscal authorities to reduce excise duty levels to augment the interventions implemented recently to address affordability and reverse this undesirable trend,” said the company.
Sparkling and non-alcoholic beverages were down 9% on prior year while alternative beverages are up 16% on prior year. Sorghum beer continued to record growth and was up 14% on prior year driven by affordability with the Chibuku Super brand driving overall category performance.
Going forward, the company said it anticipated the business environment to remain difficult, while the focus would be on capturing consumer spend and containing costs.
The board has declared an interim dividend of $1,35 cents per share to be paid to shareholders on December 10, 2014.
-The Source
