Zimbabwe’s largest listed company Delta Corporation has reported a 6% decline in revenue for the second quarter ending September on weakening aggregate demand triggered by an underperforming economy.
The economy is this year expected to register a 1,5% growth from an initial projection of 3,2% on the back of weakening commodity prices and declining agriculture output.
Delta, at US$1 billion market capitalisation accounts nearly for a third of the Zimbabwe Stock Exchange market capitalisation, reported that while lager beer improved by 5% on prior year for the quarter following price cuts, total volume was down 2% for the six months.
“Revenue is down 6% for the quarter and down 8% for the six months, reflecting changes in the portfolio mix and the recent price moderations,” the company announced on Wednesday.
“In the short term, there will be pressure on operating margins as we adopt strategies to address affordability and stimulate volume through price reductions and streamlining value chain costs. The benefits of these initiatives should start filtering through in the medium term.”
Sorghum beer category recorded a volume decline of 12% for both the quarter and the six months, the company said.
“Sparkling beverages are down 14% compared to the same quarter last year and down 15% for the six months,” the company said.
“This is partly due to increased competition particularly from imported lower priced alternative offerings. The Maheu and dairy mix beverages recorded a growth of 4% for the quarter on the back of improved product supply and the expansion of flavours.”
Last month Delta, the local unit of South Africa’s SABMiller lowered lager beer prices by up to 11% to drive volumes ahead of the festive season, bringing total price cuts to 20% since the start of the year.—Staff Reporter