• Mon. Jul 22nd, 2024

Delta’s local operations forex sales component exceeded 70% in Q3

ByEconomic Times

Jan 24, 2023

…as larger beer volume increases

By ETimes

Delta Corporation reported an 18% rise in lager beer volume in the nine months to December 31, thanks to firm demand.

For the third quarter, the group’s lager beer volume was up 17%.

“Consumer spending remains high, benefiting from the stable US dollar pricing, improvements in wages and salaries across various sectors and a buoyant informal sector, particularly in mining,” said the group in a trading update.

The firm embarked on capacity growth across all its sectors to improve product supply. Like any other business, the group was not spared from ongoing power challenges, which have increased operational costs.

“Product supply was stable although there were intermittent gaps arising from outages in power, water supplies, mismatches in the demand and supply of brands and packs,” it said.


 

“We continued to uprate our production capabilities which are supported by the injection of glass bottles and improved asset care.”

The firm keeps investing in its brands and focuses on activities that appeal to the market.

“The installation of additional packaging plant is on schedule for commissioning in the first half of 2023,” it said.

The sorghum beer volume in Zimbabwe grew by 11% for the quarter compared to the prior year and is up 12% for the nine months.

There are ongoing efforts to maximize the PET production capacity that is currently accessible throughout the regional nations and to resurrect the Scud pack to fill supply shortfalls, according to the company.

Natbrew Zambia continues to record volume growth of 11% for nine months, which includes some regional exports.

At United National Breweries South Africa, volumes were flat for the quarter but grew by 21% for the nine months, “reflecting the disruptions to operations arising from power cuts and reduced market service by resellers and distributors in response to fuel price escalations”.

“There is an encouraging uptake of Chibuku Super which is being seeded into the market ahead of the planned investment in local production capacity in the coming financial year.”

The sparkling beverage volume grew by 5% for the quarter and is up 14% for the past nine months.

“The supply of PET packs remains constrained and will be addressed by the investment in additional capacity, which is expected in the current quarter,” it said.

“The supply of returnable glass packs was affected by the delayed receipt of glass bottles and some disruptions to production operations arising from power and water outages.”

The business continues to recover market shares despite the currency related pricing distortions.

Afdis reported a volume growth of 10% for the quarter and 11% for the nine months.

“The supply of ciders was constrained by a regional shortage of glass bottles. The business commissioned a new PET line for packaging of spirits and commenced local fermentation of ciders,” said the company.

Schweppes Holdings Africa’s volume was flat for the nine months due to juicing fruit shortages earlier in the year.

“The business performance continues to be impacted by the currency related impediments in the formal retail outlets which is the business’s major trade channel. The supply of Minute Maid brands was affected by a prolonged plant breakdown,” said the company.

The volume recoveries in the important beverage industries and other consumer sectors continue to be advantageous for Nampak Zimbabwe.

As of the financials, group revenue rose 44% for the quarter and 53% for the nine months in inflation-adjusted terms, compared to growth of 407% and 419% for the quarter and nine months, respectively, in historical cost terms.

“This reflects the volume growth and the replacement cost-based pricing. The Zimbabwe businesses recorded a significant increase in the proportion of foreign currency sales during the quarter to beyond 70%,” it said.

“There was a corresponding increase in the purchases settled in foreign currency, as the economy dollarised.”

In its outlook, the company said: “The financial outturn in F23 could be affected by the foreign currency tax assessments arising from differences in interpretation of legislation on the currency of payment of certain taxes – Harare

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