Delta side steps COVID-19 to register 910% revenue growth

By Staff Reporter
BEVERAGE giant, Delta Corporation has recorded revenue growth of 910 percent (%) compared to the prior year, to stand at ZWL 10.6 billion driven by inflation-induced pricing across all product categories, according to the group’s audited financial results for the six months ended 30 September 2020.
The group noted that the operating environment was largely restrictive due to the effects of the global pandemic, COVID- 19, as selling and distribution of beverages was curtailed by the restriction of movement and social gatherings, closure of on-premise consumption outlets and prohibition of other commercial or social activities that were deemed to pose a risk of spreading COVID- 19.
Larger beer volume grew by 3% compared to the same period last year, reflecting a growth of 18% in the second quarter, reversing the sharp decline recorded in the first quarter when the COVID-19 restrictions were at their peak. Competitive pricing and consistent supply reportedly underpinned volumes recovery.
Sorghum beer volume declined by 31% compared to the same period last year due to the limited access to key trade channels such as bars, bottle stores and the rural markets during the lockdown, particularly in the first quarter. The value chain costs escalated more rapidly in response to the impact of the depreciating exchange rate on imported brewing cereals and packaging materials. Sorghum beer volume at Natbrew Plc (Zambia) grew by 8% compared to the same period last year.
The nascent volume recovery is attributed to the improved appeal of Chibuku Super.
The group stated that there still remains pressure from the illegal trading in bulk beer, compromising the business recovery efforts
However, volume is currently skewed in favour of the mainstream brands and larger packs due to changes in consumption occasions and settings.
However, the group noted that inflation-induced pricing across all product categories drove revenue growth. Earnings before interest and tax grew by 955% over last year while finance costs of ZWL145 million were driven by foreign exchange losses.
The Group foreign currency exposure from legacy debt arrangement is at US$48 million. This is matched by the financial asset of ZWL3.7 billion representing the legacy debt cash cover deposited with the Reserve Bank.

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