Zimbabwe Stock Exchange listed brewer, Delta Corporation Limited, says increased government policy inconsistencies and lack of clarity in legislation has created significant uncertainties in the operating environment.
The company secretary, Faith Musinga said the business was suffering in the face of the uncertainty.
The Zimbabwean operating environment remains complex and challenging. The focus will be on business continuity in the face of rapid policy changes,” Musinga said.
She added: “The disparities in the exchange rate prevailing in Zimbabwe and lack of clarity in the legislation relating to currency payment of certain taxes creates significant uncertainties and business risks.”
Multiple analysts have criticised the government for frequently changing policies without notice or even consulting the business people who are affected by the policies.
In its trading update for the quarter to June 30, 2022, Delta’s revenue grew 55% driven by volume growth and the replacement cost-based pricing.
Delta also benefited from favourable policies which enabled them to sell in foreign currency.
The volume of lager beer increased by 19% in the period under review supported by enhanced brand and pack supply that benefited from the addition of returnable glass.
Volume of sorghum beer in Zimbabwe climbed by 14% for the quarter compared to the preceding year as Chibuku Super was constrained by the limited production capacity.
Volumes for the sparkling beverages grew by 32% for the quarter benefitting from consistent product supply and an expanded pack and flavour offering albeit the unit being afflicted by currency related pricing distortions in the reported period and also a constrained supply of Pet packs witnessed in the period.
Volumes at African Distillers Limited (Afdis) grew by 18% in the quarter under review driven by the supply of ciders which has since stabilised.
Its associate, Schweppes Holdings reported a 9% volume increase.
The resurgence in the beverage and edible oil sectors helped Nampak Zimbabwe Limited record an overall volume gain of 16%.
On the outlook the company is looking to seize possibilities from activities that produce aggregate demand, such as mining operations, infrastructure development projects, and remittances from the diaspora.
Musinga also said Delta will implement an ambitious recapitalization drive in 2023.