Afdis to focus on product innovation

Judith Phiri, Business Reporter 

ZIMBABWE Stock Exchange-listed wine and spirit maker, African Distillers Limited (Afdis) says it will continue to focus on strategies such as market share growth and production efficiencies. 

As a subsidiary of beverage giant, Delta Corporation, Afdis manufactures and distributes wines, spirits and ciders and it has over six depots across the country. In its half year ending 30 September 2022 results, the company said despite the operating environment set to remain challenging, it will continue to focus on product innovation among other things. 

“The operating environment is set to remain challenging, with uncertainty on power supply and inflation. There are, however, opportunities for growth anchored on increased economic activity resulting from mining, agriculture, infrastructure projects, the forthcoming elections and relaxed Covid-19 restrictions. The Company will continue to focus on product innovation, market share growth, production efficiencies and cost containment measures,” said Afdis.

The company, which recorded volume growth of 11 percent compared to the previous year, said wine volume grew by 24 percent driven by improved availability and affordability of some brands which are now packaged locally. Afdis said spirit and ready to drink (RTD) volumes grew by nine percent and 11 percent respectively driven by renewed focus on direct sales distribution. 

“The Government introduced initiatives to reduce Zimbabwe dollar (ZW$) liquidity and stabilise the exchange rate in the last quarter. The reduction in ZW$ liquidity resulted in softening of demand for goods and services in supermarkets, while increasing US dollar transactions in general.” reads part of the results.

During the period under review, Afdis’ revenue in inflation adjusted terms increased 48 percent to ZW$ 14,9 billion while operating income increased 128 percent to ZW$2 billion. In historic costs terms, the company’s revenue increased 369 percent to ZW$11,4 billion, while operating income increased 463 percent to ZW$2,7 billion.

 “Revenue growth in both inflation and historic terms was due to higher volume favourable mix and replacement cost pricing, while operating profit increased due to cost management and improved margins.”

In terms of the dividend, the company said the board has recommended an interim dividend of US$0.0025 per share, amounting to US$299 000. Afdis said it was optimistic of growth next year spurred by projected economic growth and stability.

“Accessibility of foreign currency is key to smooth running of the business and the company has been able to access foreign currency requirements from both trading and financial sectors and this is also anticipated to continue in the ensuing year,” added Afdis.

Meanwhile, last month the company re-launched its revamped Gold Blend Black Whisky. Afdis said with the revamped product it was targeting a youthful crowd with the Gold Blend Black now looking bolder and more modern which will appeal to a more youthful and aspiring audience. In recent months, the company has also started packaging a number of brands locally that it used to import.