Delta’s revenue up 77% in Q3

January 22, 2021

TINASHE MAKICHI

Delta Corporation posted 77% growth in revenue for the third quarter to December 31, 2020 on the back of significant volume recovery across all beverage categories and attention to replacement cost-based pricing.

Revenue for the nine months was up 33%.

In a statement for the third quarter, Delta Corporation company secretary Alex Makamure noted that the group during the quarter benefited from improved access to foreign currency through domestic Nostro sales.

“The foreign currency is being prioritised towards settlement of the legacy debts in line with the arrangements with the Reserve Bank of Zimbabwe.

Steady progress has also been made in the settlement of the loan for the acquisition of UNB (SA),” Makamure said.

Lager beer led the volume charge growing 48% for the quarter and 20% for the nine months compared to the same period last year.

The company attributed the volume recovery to the competitive pricing and consistent product supply, benefiting from the injection of new returnable glass and fewer disruptions to production operations.

Makamure noted that with on-premise consumption curtailed, there are ongoing efforts to promote at-home consumption in line with the Covid -19 guidelines.

In Zimbabwe, sorghum beer volume grew 29% for the quarter but still trailed prior year by 14% for the nine month.

Makamure said there was improved market access following the relaxation of the lockdown measures during the quarter.

Makamure said the category was negatively impacted by limited access to trade channels such as bottle stores and rural markets in the first half of the year.

The volume at Natbrew Zambia declined by 2% for the quarter but was up 5% for the nine months. The category witnessed the resurgence of illegal trading in bulk beer which trades at a discount to packaged products, Makamure said.

The South African entity, United National Breweries, recorded a year on year decline of 19% in volume for the quarter as South Africa implemented very strict restrictions and bans on the sale and consumption of alcohol.

The total ban on alcohol sales was re-imposed at the end of December 2020. Sparkling beverages volume grew by 66% for the quarter and is up 42% for the nine months compared to prior year.

Makamure said the category has benefited from consistent product supply and competitive pricing. He said the sales mix shifted towards take-home packs in response to the restrictions on gatherings.

African Distillers registered volume growth of 37% for the quarter and 25% for the nine months driven by the spirits and ready to drink ciders.

In the outlook, Makamure said the business outturn for the fourth quarter will be subdued after authorities in regional markers invoked heightened levels of lockdown. He said the Zimbabwean economy could benefit from improved access to foreign currency and lower inflation.  f

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