Have you ever paused to consider what the Zimbabwe Stock Exchange (ZSE) would look like if Delta Corporation had migrated to Victoria Falls Stock Exchange (VFEX)?
As the largest listed entity on the ZSE, accounting for over 30% of its market capitalisation, Delta is a key driver of market activity on the ZSE.
On May 16, 2025, Delta released its full year financial results for the period ending March 31, 2025. After closely tracking its third quarter and nine-month updates, the results came as no surprise. My projections were well aligned with actual performance.
Despite a 3% decline in overall volumes, and a 6% decline when including former associate Schweppes, Delta posted a 5% increase in revenue for the year.
This was largely driven by price adjustments, reaffirming that in the absence of volume growth, high prices can still uplift revenue.
Of the group’s four main revenue segments for FY25, only two recorded consistent volume growth across the third quarter, nine-month period, and full year.
These are the lager beer segment and the Wines & Spirits division under its subsidiary, African Distillers (Afdis). Lager beer volumes rose by 4% in Q3, 7% over nine months, and 8% for the full-year. Afdis delivered even stronger performance, with volumes up 14% in Q3, 12% over nine months, and 14% for the year.
On the other hand, the sparkling beverages category saw declines, with volumes falling 16% in Q3, 1% over nine months, and 4% for the full year.
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However, a notable highlight within the soft drinks’ portfolio was the strong growth of Shumba Maheu, which recorded a 29% volume increase for the year. This surge followed the brand’s relaunch in November 2024, featuring an expanded and enhanced flavour range.
Sorghum beer volumes also declined, dropping 8% in Q3, 10% over the nine-month period, and 7% for the year.
With these top-line and segmental shifts in mind, let’s now examine Delta’s revenue composition and performance in greater detail.
Lager beer: Delta’s cash cow
Lager beer retained its position as the leading contributor to Delta Corporation’s top line, accounting for approximately 44% of total revenue in FY25.
Volumes grew by 8%, driving an 11% increase in revenue to US$351,9 million.
This marks the continuation of a five-year growth trend in lager volumes, with the segment maintaining a dominant market share exceeding 95% since 2023. Undoubtedly, lager beer remains a key revenue engine and a reliable cash cow for the group.
Wines, spirits volumes grow
Wines and spirits under Afdis, Delta’s subsidiary, posted an impressive 15% overall volume growth in FY25. This included a 7% rise in spirits, 29% in wines, and 21% in ciders.
The segment benefited from reduced informal imports following intensified anti smuggling efforts, while the introduction of new RTD offerings, such as NightSky Gin and Tonic and the Hunters 660ml returnable glass bottle, further supported volume growth.
Despite this strong performance, Afdis contributes just 7% to Delta’s overall revenue, making it the smallest revenue stream for now. All eyes now turn to Schweppes to see how it will shape up in FY26, since Delta increased its shareholding from 49% to 69% effective April 1, 2025, making it a de facto revenue driver for the group.
Sorghum beer volumes decline
Overall, sorghum beer volumes declined by 7% for the year. While the Zimbabwean market registered a modest 1% increase, volumes in Zambia fell sharply by 30% due to persistent power supply issues, and South Africa recorded a 10% drop linked to prolonged labour disruptions at the main production facility.
The segment also faced significant headwinds, including elevated grain prices caused by drought conditions, the cessation of export operations, and growing competition from rival brands such as Nyathi.
Despite these setbacks, sorghum beer remains Delta’s second largest revenue contributor, accounting for 28% of total revenue. The steep volume declines in key export markets are concerning given the segment’s importance to the group’s top line.
Looking ahead, an improved agricultural season may ease grain price pressures, but Delta will need to adopt strategic measures to defend its market share and resolve ongoing export-related challenges.
Sparkling beverage volumes fall
Sparkling beverage volumes fell by 4% in FY25, mainly due to price increases driven by the sugar tax and a surge in regional imports. The segment contributed 21% to Delta’s revenue, ranking as the third largest contributor. Increased competition from affordable alternatives, such as those from Varun Beverages, also played a role in the volume decline.
Delta paid approximately US$21,1 million in sugar tax last year, with total collections rising to US$31,2 million between February and December 2024.
In response, the group has introduced low and zero sugar offerings and price moderation strategies to retain consumers.
However, with Schweppes — now a subsidiary — posting a 15% volume decline, further action is necessary for the soft drinks segment to protect and maintain its market share.
Taimo is an investment analyst with a talent for writing about equities and addressing topical issues in local capital markets. He is an active member of the Investment Professionals of Zimbabwe community, pursuing the Chartered Financial Analyst charter designation.
