Delta remains bullish

HARARE - Blue-chip firm Delta Corporation (Delta) says it expects its overall financial performance for the year to March 2013 to be in line with projections, despite lager beer sales volumes slumping six percent in the fourth quarter.

“The decline is partly attributable to the adverse impact of the excise duty increase in December 2012 and the resultant disruption to retail pricing arising therefrom,” said Delta in a trading update.

The beverages manufacturer, set to publish its full year results soon, however, managed to record a four percent increase in lager beer volumes ahead of prior year.

Last year, government increased excise duty on lager beer from 40 percent to 45 percent of manufacturer’s price.

The group said total beverage volumes closed the year 2013 marginally changed from prior year as the growth in lager beer, sparkling beverages and Maheu was offset by the decline in sorghum beer.

“There was a noticeable slowdown in consumer spending in the quarter ending March 2013,”said Delta.

The sparkling beverages volume grew seven percent during the quarter under review while that for sorghum beer went down six percent.

Delta reported strong growth in Maheu volume which surged by 42 percent for the year and 77 percent for the quarter, benefitting from the shift from importation to local production.

“Revenue for the year grew 14 percent and seven percent for the quarter, spurred by a more favourable sales mix,” said Delta.

Delta, which is owned 40 percent by South Africa-based brewer SABMiller, last year, became the first company to reach $1bn market capitalisation on the local bourse.

In its last full-year results for the year to March 2012 Delta Corporation posted a 38 percent rise in full-year earnings, driven by strong demand for alcoholic and non-alcoholic beverages.

Delta said basic earnings per share jumped to 6,22 cents on the back of a 19 percent increase in beverage volume sales.

Lager beer sales reached 1,98 million hectolitres during the year, almost 100 percent of Delta’s capacity.

Last November, the company commissioned its new $17 million beverages bottling plant that has a capacity to produce 700 000 hectolitres (70 million litres) per annum.

The new beer plant is more efficient on utilities like water and electricity which has been a major cost reduction mechanism and has been added to its other production lines that were previously installed in order to increase output and production.

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