ZIMBABWE’S largest beverage manufacturer, Delta Corporation (Delta) has reported a 5,6% slump in earnings to US$45 million for the half-year to September 30 compared to the same period last year on account of declining sales volumes as consumers are hard-pressed for cash.
The company said revenue for the period went down 4% to US$302,2 million while operating income also decreased by 9% to US$57 million.
“This was a challenging half-year characterised by a deteriorating macro-economic environment,” said chairman Canaan Dube in a statement.
Going forward, Delta expects the business environment to remain difficult. In a presentation, Delta chief executive Pearson Gowero said revenues fell due to declining volumes for high-margin products with consumers searching for value and switching to affordable sorghum beer.
He said larger volumes declined by 25% for the period under review to 695 hectolitres, while sparking beverages volumes also fell by 9% to 708 hectolitres.
However, the alternative non-alcoholic beverages volumes grew by 15,5 % while the sorghum beer volumes also grew by 14%.
Gross sales for larger and sparkling beverages went down by 15% to US$139 million and 10% to US$99 million respectively. Alternative beverages and sorghum beer gross sales grew by 16% to US$8 million and 24% to US$94 million respectively.
The company’s operating margin went down from 23,04% from prior period to 21,56%. Cash generated from operations went down by US$12 million from prior year to US$61 million due to increased barley and maize stock holding.
Capital expenditure to date stood at US$13,6 million mainly in respect of capacity enhancements, productivity and efficiency improvements.
Net cash closed the year at US$29,6 million.