By Alois Vinga
LISTED spirits and wines producer, African Distillers (AfDIS) has acknowledged an increase in US$ sales at a time when the company has seen an 11% surge in volume growth.
This comes on the backdrop where authorities have tightened screws on money supply and all risky inflation triggers in the economy, which among other measures, include blocking speculative borrowing, introducing gold coins as an alternative investment option as opposed to chasing after Zim$ on the parallel market.
The impact of these measures have, therefore, seen the economy channelling foreign currency directly to manufacturers and providers of goods and services.
Confirming the development, AfDIS Chairman, Mathlogonolo Valela commended the government for the initiatives.
“The trading environment for the period under review was challenging, characterised by rising inflation, high interest rates and supply chain disruptions.
“The government introduced initiatives to reduce ZW$ liquidity and stabilise the exchange rate in the last quarter.
“The reduction in ZW$ liquidity resulted in the softening of demand for goods and services in supermarkets whilst increasing US dollar transactions in general trade,” he said.
Market watchers believe the growing foreign currency revenue stream determined by internally generated US$ sales coming over and above the Foreign Exchange Auction system and interbank market will spur local companies’ productivity by enabling them to meet raw materials and machinery demands.
Meanwhile, during the half year period ended September 30 2022, Valela said the company recorded sales volumes growth.
“The Company recorded a volume growth of 11% compared to prior year. Wine volume grew by 24% driven by improved availability and affordability of some brands which are now packaged locally.
“Spirit and Ready to Drink volumes grew by 9% and 11% respectively driven by renewed focus on direct sales distribution,” he said.
In inflation adjusted terms, revenue increased by 48% to ZW$14,9 billion whilst operating income increased by 128% to ZW$2 billion registering a 369% increase in historic terms attributable to favourable mix and replacement cost-based pricing while operating profit increased due to cost management and improved margins.
“Going forward, the company will continue to focus on product innovation, market share growth, production efficiencies and cost containment measures. The board has recommended an interim dividend of US$0.0025 per share, amounting to US$299 000,” added Valela.