RYAN CHIGOCHE
Zimbabwe’s biggest brewer, Delta Corporations, delivered a stronger than expected performance in the year to March 31, 2021 on the back of rising demand, despite the uncertainty and volatility created by Covid-19 interruptions, Business Times can report.
Revenues for the group were ZWL$40bn, up 39% from ZWL$29bn reported in the prior comparable period.
Profit for the firm, which is a dominant producer of commercial beer in Zimbabwe and enjoys more than 90% of the beer in the country, grew 73% to ZWL$6.4bn during the reviewed period from ZWL$3.7bn reported in the prior comparative period.
The lager beer volumes rose 17% compared to prior year.
Board chairman, Canaan Dube said the volume recovery was mostly during the second and third quarters following the relaxation of the Covid-19 restrictions.
“The group adopted strategies to stimulate demand through competitive pricing in an environment of weak consumer demand and currency related distortions in value chain costs,” Dube said in a statement accompanying the company’s financial results.
Sparkling beverages volume grew 33% in the period under review compared to prior comparative period, albeit from a low base.
Dube said the business recorded a notable recovery in market share on the back of consistent product supply and competitive pricing.
The category, Dube said benefited from increased social and economic activities which were significantly curtailed during lockdowns.
However, there were some constraints in the supply of key raw materials such as sugar and carbon dioxide which affected market supply during the period under review.
Sorghum beer volume declined 7% during the reviewed period compared to prior year, weighed down by the limited access to key trade channels such as bars, beerhalls and bottle stores which were closed during most phases of lockdowns.
The business relied on imported maize for most of the year.
However, sorghum beer volume at Natbrew Plc in Zambia grew 6% during the reviewed period.
Dube said the business faces significant competitive pressure from the illegal trading in bulk beer in addition to the cost pressures arising from the escalation in the cost of imported materials due to the impact of currency depreciation.
The South African entity, United National Breweries, was closed for extended periods as the authorities implemented very strict prohibitions on the sale and consumption of alcohol under the Covid-19 national lockdown measures.
Dube indicated that the entity was implementing volume recovery measures.
Associate company, African Distillers recorded a volume growth of 31% compared to the prior year, driven by the spirits and ready-to-drink categories as their wine category was adversely affected outlets by hard lockdowns.
Another associate company, Schweppes Holdings Africa, saw their volume drop by 1% indicating a notable recovery in mainline crushes and syrups and the benefits from the relaunch of the Minute Maid Juice drinks.
Dube however, sounded a note of caution saying the Delta board was concerned by Zimbabwe’s unstable operating environment.
“The board is concerned about the unstable operating environment as indicated by hyperinflation, frequent changes to the policy environment, a weak local currency, and the existence of multiple and disparate exchange rates,” he said.
He said the access to foreign currency, however, improved following the introduction of a foreign currency auction system and partial re-dollarisation.
