Covid-19 hammers Afdis

LIVINGSTONE MARUFU

Listed wines and spirits maker, African Distillers Limited (Afdis), reported a loss of ZWL$298.8m in the six months to December 31 2020 from a profit of ZWL$49.2m in prior comparative period due to supply disruptions caused by the Covid-19 induced lockdown.

Afdis chairman Pearson Gowero said although Afdis continued to operate, the Covid-19-induced lockdown has significantly impacted on the operations of the business.

Revenues for Afdis, however, grew 40% to ZWL$1.7bn in the reviewed period from ZWL$1.2bn reported in the prior comparative period.

“The full impact of Covid-19 remains uncertain. (The loss) was due to wines which declined 22% as it was mainly affected by reduced activity in the restaurants and hotel channel compounded by supply disruptions due to Covid-19 restrictions,” Gowero said.

Volumes grew by 39% from the prior period, mainly driven by spirits and ciders which grew 57% and 33% respectively.

Gowero said the net cash on hand stood at ZWL$195m during the reviewed period, from ZWL$32.8m in June 2020.

Afdis said it has a business continuity plan to operate without inference even during the tight lockdown periods.

Despite recording a loss, Afdis posited that  there was  a general  improvement in the economic environment  over the six month period under review owing to a relatively stable foreign currency market  and improved  availability  of foreign currency  both  from the auction system  and relaxed  foreign currency regulations.

The company is anticipating a good 2020/2021 summer cropping season to benefit the economy by increasing the disposable incomes, raw materials, and food supplies resulting in net savings on the import bill.

Gowero said the company has implemented mitigatory measures that will ensure business continuity.

Going forward, Gowero said the company will continue to focus on exploring revenue growth opportunities, efficient conversion of cash resources into raw materials and cost containment.

If these measures are observed, this will ensure business viability and profitability, Gowero said.

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