AfDIS’s US$4.4m capex fuels growth
STAFF WRITER
Wines and spirits manufacturer African Distillers Limited (AfDIS) invested US$4.4m in capital expenditure during the year to modernise its production facilities, improve plant reliability and boost operational efficiency as it positions itself for future growth.
The investment comes as the company expands its product portfolio to meet changing consumer preferences, particularly rising demand for ready-to-drink (RTD) beverages and more affordable product offerings.
In the group’s annual report, chairperson Matlhogonolo Valela said the investment strengthened AfDIS’ production platform and underpinned a sharp improvement in financial performance.
“Capital expenditure of US$4.4m was incurred during the year, directed towards modernising plant and equipment, improving reliability and enhancing operational efficiency. These investments strengthened the operating platform and supported improved throughput and cost efficiency.
“As previously communicated, the business is advancing the acquisition of a new packaging line valued at US$8m, scheduled for commissioning in the ensuing financial year. This strategic investment will unlock additional capacity, improve production flexibility and address existing bottlenecks, particularly in high-growth categories,” Valela said.
The company delivered a robust performance during the year, supported by firm consumer demand, improved product availability and reduced competition from grey-market imports.
Total sales volumes surged 50% year-on-year, with strong growth recorded across all product categories. Ready-to-drink (RTD) beverages led the expansion with a 62% increase in volumes, followed by wines at 57% and spirits at 34%.
AfDIS said the performance reflected balanced growth across its portfolio, driven by targeted brand investments, stronger route-to-market execution and disciplined commercial strategies.
Revenue climbed 56% to US$93.2m, buoyed by higher sales volumes across all product categories, supported by an improved product mix and pricing discipline.
Operating income more than doubled, rising 118% to US$12.2m, as improved operating leverage, better absorption of fixed costs and disciplined cost management lifted profitability.
Total assets increased 37% to US$36.8m, reflecting continued investment in productive capacity.
The company, however, said access to foreign currency remains critical to sustaining smooth operations and supporting future growth.
Despite this challenge, AfDIS maintained a strong liquidity position, with a current ratio of 1.95 times, meaning it held US$1.95 in current assets for every US$1 of short-term obligations, providing adequate capacity to fund its investment programme.
Reflecting the improved earnings performance, the board declared a dividend for shareholders.
Looking ahead, management said it remains focused on driving sustainable growth through continued product innovation, capacity expansion and market development, underpinned by anticipated growth in agriculture, mining, infrastructure investment and diaspora remittances.
