Zimbabwe Stock Exchange-listed spirits and wines maker, African Distillers (AfDIS), is worried about severe economic headwinds which will likely impact on the company’s performance.
In a statement accompanying the company results for the half year ended September 30,2022 board chairman Matts Valela said the challenging operating environment was due to crippling power cuts and high inflation.
“The operating environment is set to remain challenging, with uncertainty on power supply and inflation. The company will continue to focus on product innovation, market share growth, production efficiencies and cost containment measures,’’ Valela said.
Due to power cuts, companies are forced to use diesel-powered generators, which are expensive to operate.
In its financial results for the half year to September 30 2022, revenue for the group rocketed 48% to ZWL$14.9bn from ZWL$10.05bn reported in the prior comparative period on the back of higher volume, favourable mix and replacement cost-based pricing.
Profit increased to ZWL$584m in the reviewed period from ZWL$175m achieved in the same period in 2021.
Overall volumes growth increased by 11% in the period as wine volumes grew by 24% driven by improved availability and affordability of some brands which are now packaged locally, with spirit and ready to drink volumes growing by 9% and 11% respectively.
Despite the challenging operating environment, Valela said there were opportunities for growth anchored on increased economic activity resulting from mining, agriculture, infrastructure projects, the forthcoming elections and relaxed Covid-19 restrictions.