Delta in profit warning

HARARE - Beverages manufacturer Delta Corporation (Delta) has warned of lower profits for the full year to March 2015, citing “changes in the sales mix and the deliberate strategies to preserve volumes”.

Delta recorded a $104 million profit last year up from $75 million profit registered in 2013.

In a trading update released on Tuesday, the SABMiller associate registered a 17 percent decline in lager volumes in the 12 months to March this year and three percent lower in the fourth quarter to March.

“This reflects a deceleration in the rate of decline compared to the preceding nine months.

“The price reductions implemented at the beginning of January 2015 have improved the affordability of our brands and should, over time, stem the volume decline,” said Delta.

The soft drinks volumes comprising both sparkling and alternative beverages were down five percent and six percent for the quarter and the full year, respectively.

The Zimbabwe Stock Exchange-listed brewer noted that the recent review of prices of some brands and packs is expected to improve the affordability and competitiveness of this product portfolio.

“The Maheu and dairy mix beverages recorded a growth of 11 percent for the full year.

“This category is expected to benefit from the additional production capacity commissioned in October 2014, the refreshed Shumba Maheu package and the roll out of additional flavours,” said Delta.

The sorghum beer volume was six percent up for the quarter and eight percent above prior year for the full year.

“The supply of Chibuku Super improved during the quarter, with the product attaining a contribution to total volume of about 50 percent by March 2015.

“The installation of the new production facility at Fairbridge in Bulawayo is on schedule for full commissioning by July 2015,” said the company.

In the period under review, Delta’s revenue was down five percent for the quarter and six percent for the full year.

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