Afdis leans on forex earnings

Nelson Gahadza

Spirits and winemaker, African Distillers says it will continue to leverage on foreign currency generated from trading to ensure continuous supply of imported inputs.

Afdis business is premised on the manufacturing, distribution and marketing of branded wines and spirits and Ciders for the Zimbabwean market and for export.

Ms Lydiah Mutamuko, the company’s secretary in a trading update for the quarter to June 30, 2022 said volumes grew 18 percent compared to the same period prior year, benefiting from improved supply into the market and increased outdoor activities as the Covid restrictions were relaxed.

“Wines volume grew by 30 percent over prior year mainly driven by 4th Street wine due to improved availability and affordability following the commissioning of the brand’s local production,” she said.

She noted that Spirits and ready to Drink (RTD) volumes grew 23 percent and 12 percent respectively as a result of strong demand and increased market penetration.

During the quarter under review, revenue grew by 57 percent in inflation-adjusted terms over the last year whilst in historic terms grew by 285 percent.

“Revenue growth in both financial reporting sets was due to improved demand and inflation-related adjustments,” she said.

Ms Mutamuko noted that the operating environment is set to remain challenging with inflation and power shortages impacting business.

She said the use of the multi-currency regime has been legislated and this will aid businesses with their planning.

“Management continues to implement various initiatives focusing on revenue and profitability growth. Product innovation, market share protection and cost containment will enhance shareholder value,” she said.

Afdis has been focusing on localising some of its brands as well as exploring revenue and profitability growth opportunities through product innovation.

Some of the products localised for production included the 4th Street which was mainly imported from South Africa.

As part of the strategy to streamline costs, the company also commissioned a US$1 million cider plant for its Hunters Dry and Hunters Gold brands which will use inputs sourced locally.