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Delta earnings up despite imbibers drink less lagers
13/11/2013 00:00:00
by The Source
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ZIMBABWE'S largest beverage manufacturer Delta’s revenue for the half-year to 30 September grew five percent to $315.5 million, underpinned by a similar growth in volumes, reflecting a depressed market.

The brewer, a local unit of the London- headquartered SABMiller, said volumes were up four percent over the same period last year, largely driven by recovery in sorghum beer.

The segment sales increased by nine percent buoyed by high demand in the new product line, Chibuku Super. Income was up 24 percent to $76 million.

“We are selling everything we can produce at the moment and we are scrambling for investment for another plant to boost  production,” finance director, Max Valela told an analyst briefing on Wednesday.

Chief executive, Pearson Gowero said the group will commission a new plant for the sorghum beer line around March, 2014.

Sales in its cash cow lager beers remained depressed, slowing 10 percent because prices have remained high following an increase in excise duty at the beginning of the year. Revenue was four percent lower at $164 million.

Government increased excise duty of clear beer from 40 percent to 45 percent  in the 2013 national budget.

“We are lobbying the government to lower excise duty to drive lager growth,” Valela said.

Sparkling beverages volumes were steady, recording an eight percent growth margin, while income was also up by a similar margin to $110 million.

Growth in maheu volumes was 57 percent on the prior year, while revenue from the segment was 59 percent higher at $7 million.

Operating income was 10 percent higher while operating margins improved to 23 percent driven by cost efficiency.

Total current liabilities stood at $118.8 million, similar to 2012 although short-term debt was lower at $15.7 million compared to $18.6 million.


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