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SPIRITS distiller and wines maker African Distillers Limited said volume performance and revenue for the first quarter of 2017 is ahead of prior year on the back of increased demand in wines and spirits.Without providing the actual figures, Afdis managing director Mr Cecil Gombera yesterday told shareholders at an annual general meeting that the group had achieved a double-digit growth in revenue and volumes.
Low competition in certain product lines also worked to Afdis’ advantage as the company consolidated its growing market share.
“Given the prevailing economic conditions, current business performance has been pleasing with growth in both volumes and revenue for the first quarter of F17. This growth, as a result of gaining market shares as foreign competitors fail to make product available due to foreign currency shortages, will remain limited to certain segments of the market,” he said.
Volume performance for wines business for the quarter grew 28 percent on prior year levels. However, revenue and volumes for the spirits business is expected to taper on in line with the prevailing economic environment.
The spirits business contributes 50 percent of both volume and revenue. Mr Gombera said the group will continue on growth strategies to prop up, for instance, the whisky category which faces competition from imports.
“Revenue performance will be affected by price reductions aimed at stimulating demand to maintain competitiveness,” he said.
The ready to drink business is expected to grow by 30 percent on prior year levels driven by strong performance from ciders. Market watchers have guided a commendable performance from the ciders division on growing demand.
Ciders are mainly for the upper middle class and analysts believe this market has not been badly affected unlike lagers category from peers Delta.
Management at Afdis has indicated two cider brands — Hunters and Savanna — have already become established and prospects are high to appeal to new consumer entrants. Additionally, the local production of ciders which started in financial year 2015 is also expected to further boost this category on the market.
“Exploitation of the sizeable on-consumption market segment will further strengthen growth strategies during F17.
“It is expected that this category will contribute 45 percent of total volumes, up from 41 percent recorded in F16,” said Mr Gombera.
By close of trades on the Zimbabwe Stock Exchange, Afdis shares stood at 50 cents. The stock has reached a year on year high of 55 cents and year on year low of 40 cents.
Online Reporter