Delta pays $ 27,8m dividend

HARARE - Beverages manufacturer Delta Corporation Limited (Delta) has paid out a total $27, 8m dividend for the year to March 2014.

The group — about 22 percent owned by South Africa-based SABMiller — declared a $2,25 cents per share interim dividend bringing the total dividend for the year to$3, 55 cents per share, a four percent increase from prior year.

This comes as most Zimbabwe Stock Exchange (ZSE) listed firms are struggling to declare dividends due to a depressed economic environment coupled with an acute liquidity crisis.

Since adoption of the multi-currency system in 2009, Delta has consistently declared dividends, indicating a healthy financial performance and strong profitability thrust despite operating in a subdued market.

The company says it will continue to invest in plant capacity, but warned that “in the absence of deliberate strategic intervention by all stakeholders the economy is likely to continue on a difficult path”.

Recently, SABMiller said the current economic crisis in Zimbabwe has affected the bottom-line of Delta.

“The economic environment in Zimbabwe hampered the performance of our associate, Delta, with lager volumes declining by 18 percent,” its chief executive Alan Clark said.

“However, traditional beer volumes grew strongly at 12 percent, supported by the innovative Chibuku Super… soft drinks volumes also grew in the year,” he said.

This comes as the prospects for the projected 6,1 percent economic growth this year are slowly fading due to a biting liquidity crunch, deflation and lack of aggregate demand.

The World Bank has already forecast a 3,4 percent gross domestic product growth this year while equities advisory firm MMC Capital has projected a 1,5 percent growth.

In the year to March 2014, Clark said, lager volumes in Africa grew by six percent buoyed by growth in a number of markets, although growth was hampered by poor economic fundamentals in South Sudan and Zimbabwe.

“Our portfolio continued to be relevant to our consumers with Castle Lite volumes up 31 percent, supported by strong performance across our local mainstream brands, as well as Eagle lager in the affordable segment,” he said.

Clark said Chibuku Super, a traditional beer in plastic packs with a longer shelf life, was now available in five markets, having been launched in Mozambique during the year and in Tanzania and Malawi recently.

Delta has said the economy requires a quick policy shift to stimulate growth after a poor performance in 2013 blamed on weakening consumer demand and high government levies.

Delta’s mainstay lager beers volumes dropped 18 percent in the full-year to March 2014 while total beverage volumes remained flat compared to the prior year.

“I think one thing that is apparent is that we are witnessing worsening economic fundamentals. Everyone was hopeful post the election in July last year and I think some part of that hope is slowly turning into some kind of despair,” said chief executive,

Pearson Gowero at a briefing for the group’s financials.
Zimbabwe’s economy has slowed down since the July 31 polls, which saw an end to a four-year unity government.

The country has also struggled to attract Foreign Direct Investment in recent years or funding for its economic blueprint, ZimAsset due to concerns over the perceived lack of respect for property rights and uncertain business climate, in particular the implementation of the empowerment law. — Business Live

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