Afdis in $700K dividend

HARARE - Spirits and winemaker African Distillers Limited (Afdis) has declared a $750 807 dividend for the year ended June 2017 buoyed by increased volumes and production.

Afdis chairperson, Pearson Gowero, said the firm — whose revenue surged by $2,8 million to $25 million in the year under review — had also recorded an operating income increase from $1,4 million to $4 million.

“The board has recommended a final dividend of 0,45 cents per share, resulting in a total dividend of 0,65 cents per share for the year. The total dividend for the year will amount to $750 807,74,” the Afdis boss said in a statement accompanying financial results for the period.

Gowero pointed out that the firm’s improved performance was a result of an 18 percent volume increase complemented by a reduction in overheads as the company launched new product lines for the low-end market.

In the year under review, Afdis incurred a net exchange loss of $360 000 due to a significant rand exposure of $2,2 million, with Gowero saying the full impact of this was, however, reduced by interest income of $140 000 earned from investment of surplus cash.

“The prior year profit after tax was adversely affected by reorganisation costs and an investment write-off totalling $1 million. If the distortion relating to this is removed, the earnings per share and profit after tax would have increased by 31 percent in the period under review,” he said.

The balance sheet remains strong with a current ratio of 2,54 compared to 2,28 in prior year and significant cash resources of $7,5 million.

Cash generated from trading amounted to $4,8 million, a 64 percent increase on prior year.

The Afdis boss said demand during the period under review was firm, but the company could not fully satisfy the market due to intermittent product shortages as a result of severe foreign currency constraints.

Going forward, Afdis expects disposable incomes to improve.

“The good agricultural season is expected to improve disposable income and guarantee the country of sufficient food supplies. This will result in a net saving on the food import bill. It is, however, likely that foreign currency shortages will continue and this will limit business growth,” said Gowero.

Management will continue to focus on efficient conversion of cash resources into raw materials as well as exploring revenue growth opportunities and implementing further cost control measures. This would ensure continued viability and profitability.

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