HARARE: Delta Corporation on Wednesday reported a 4 percent increase in after tax profit to $32,3 million for the six months to September, from $30,98 million in the comparable period last year on improved finance and income from associates.
Revenue rose by one percent to $250,1 million from $246,6 million in the same period last year driven by higher volume of lager beer.
Lager beer volumes were up 11 percent to 676 hectolitres while gross sales increased by 9 percent to $119 million.
“Volume recovery was driven by value packs and value brands (Eagle) due to improved disposable incomes encouraging consumers to trade up from subsistence and economy categories,” chief executive, Pearson Gowero told analysts.
Sparkling beverages volumes remained flat while sales of alternative beverages increased by 19 percent on the prior comparable period.
Sorghum beer volumes declined by 4 percent on the back of disruptions experienced in the rollout of the new 1,5 litre ‘scud,’ coupled with transactional challenges in the rural markets and a shift to lager beer.
However, the company envisages sorghum beer volumes to improve in the third quarter.
“The launch of an improved 1,5 litre Scud is expected to impact volume and revenue from third quarter,” Gowero said.
Earnings before tax, interest, depreciation and amortisation (EBITDA) fell four percent to $53 million, reflecting the contribution of value packs and brand in the mix.
Net finance income increased to $3,4 million from $1,8 million in the comparable period last year.
Its share of profit from associates increased by more than four fold to $1,6 million from $351,000 in the same period last year, driven by positive performance from both Afdis and Schweppes which recorded revenue and volume growth in the period.
However, Gowero said Nampack, which is on a closed period, experienced challenges with raw materials arising from shortages of hard currency.
Delta owes foreign shareholders a total of $39 million with respect to unremitted dividends, according to finance director Matts Valela. The group also owed foreign creditors $20 million as a result of challenges in making foreign payments, a situation which he said would cause disruptions in its operations in the medium term.
“So far we have not stopped any production because of lack of inputs and spares , but there is a risk that we will suffer disruptions as we fail to settle foreign creditors on time,” Valela said.Advertisement
The acquisition of a controlling stake in National Breweries Plc of Zambia will help expand its footprint in the region but will have minimal impact on its financials this year. The transaction is expected to be complete by end of March next year.
Delta declared a dividend of 2,25 cents per share.