Festive cheer eludes Delta as volumes dip

HARARE - Zimbabwe's largest beverages maker, Delta Corporation (Delta), says it recorded subdued volume and revenue performance for the quarter to December 31, 2015, on the back of depressed aggregate demand.

Delta — 38 percent-owned by global brewer SABMiller and with over $1 billion market capitalisation on the Zimbabwe Stock Exchange (ZSE) — said during the quarter its revenue was down five percent and down nine percent for the nine months to December.

“Larger beer volumes declined by 14 percent compared to prior year for the quarter reversing the nascent recovery in the previous quarter.

“The volume is down six percent for the nine months to December 2015. The consumers continue to shift to cheaper alcohol categories,” Delta said in its trading update for the quarter released yesterday.

Delta’s sorghum beer, which usually performs well as it caters for the low end portfolio, posted flat volumes on prior year for the quarter and was eight percent down for the nine months

“The category continues to benefit from consumers drifting from other alcohol alternatives and the increased output of Chibuku Super, which remains in short supply,” said Delta.

The SABMiller associate, which accounts for a third of market capitalisation on the Zimbabwe Stock Exchange, said maheu and dairy mix posted a seven percent slump for the quarter compared to prior year, attributed to a supply challenge in November.

“The alternative beverages category is five percent below prior year for the nine months,” the group said.

Sparkling beverages volume was flat on prior year for the quarter and down nine percent for the nine months, the group however said there was some increase in demand driven by the high temperatures experienced in the period.

The group last year reviewed beer prices downwards for the pint (375ml) and the quart (750ml) by $0,10 and $0,05 respectively, to stimulate consumer spending as tight liquidity bit into profit margins.

In December, the group introduced a new beer variation in the Carling family called the Carling Blue Label, as it sought to attract consumers to its lagers.

However, economic woes left an indelible mark on the listed blue-chip counter as it recorded a 19 percent decline in profits to $35,7 million in the half year to September 2015 as a result of declining economic conditions in the country.

The beverage maker’s profit for the year to March 31, 2015 also took a knock on the back of lower sales value and volume in the group’s larger and sparkling units.

Delta, which recorded a $104 million profit in 2014 up from $75 million profit registered in 2013, posted a profit of $92,8 million in 2015.

Delta posted $92,8 million profit in 2015.

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