BUSINESS REPORTER
Listed spirits and wine maker African Distillers (AfDIS) reported a 29% profit decline to ZWL$1.55bn in the 12 months to March 31 2023 from ZWL$2.19bn reported in the prior comparative period, largely due to high cost pressures.
It comes at a time when the economy is battling high inflation, high-interest rates, and crippling power cuts.
“Cost containment measures were in place over the period, however, cost pressures were experienced in distribution, fuel and power, payroll, and maintenance,” AfDIS chairman Matts Valela said.
Revenue for AfDIS increased by 56% to ZWL$41bn while operating income increased by 15% to ZWL$5.4bn. The top line growth was driven by increased volume.
Volume growth was strong at 18% above the prior year mainly driven by the Ready to drink segment, which grew by 23%.
Wines and Spirits volumes grew by 16% and 14% respectively and the increase in volume was due to improved product availability, increased market penetration, and promotional activity.
Vela said the acquisition of a major shareholder and partner, Distell Ltd by Heineken BV has been approved and implemented with effect from April 26, 2023.
The company continues to receive support from Distell in line with the existing franchise and technical arrangements. It is anticipated that no adverse changes will arise from the acquisition.
AfDIS said due to the absence of official general price indices in February and March 2023 following the promulgation of Statutory Instrument 27 of 2023 on 3 March 2023, the company’s directors have estimated CPIs for these two months.
The estimated CPI is based on the exchange rate movement and this is an area of significant estimation uncertainty and relevant disclosures.
The company has declared a dividend.
In the outlook, Vela said the trading environment was envisaged to remain challenging and uncertain, however, it is also anticipated that there will be opportunities for business growth.
The company, he said, will continue leveraging on ensuring full product availability, market share protection, and brand portfolio expansion for business growth.
AfDIS will focus on production efficiencies and cost containment initiatives, he said.
