Afdis volume growth drives 7 percent revenue increase

Oliver Kazunga

Senior Business Reporter

LISTED spirits and wines maker, African Distillers Limited (Afdis) recorded a 7 percent growth in revenue to US$26,2 million for the half-year ended September 30, 2024 driven by increased volumes.

“Revenue grew by 7 percent to US$26,2 million due to increased volume. In the corresponding period last year, the group’s revenue stood at US$24,4 million.

Operating income, at US$1,5 million, was lower than prior year partly due to thinner margins from price reductions meant to counter competition from illegal imports,” said Afdis in a statement accompanying financial results for the year under review.

In the period under review, the company recorded volume growth of 11 percent compared to the prior period mainly driven by Ready to Drink (RTD) and Wine segments which grew by 22 percent and 13 percent respectively.

RTD volume was influenced by promotions and the successful launch of a new product, NightSky Gin & Tonic, which Afdis said was well received by the market.

“The Wine category benefited from improved availability of affordable wines and intensified focus on direct sales distribution. The widespread distribution of cheaper and illicit spirits curtailed growth of the category,” said the manufacturing concern.

On the macro-economic environment for the period under review, Afdis said, the environment was generally stable in the first quarter after the introduction of the Zimbabwe Gold (ZiG).

“However, there was significant depreciation of the local currency in the second quarter resulting in price distortions in formal trade.

“Most businesses encountered challenges in sourcing foreign currency from the banking system resulting in some disruptions in supply of goods and services.” In the outlook, Afdis said the forecast normal agricultural season, increased activity in mining, tourism, and infrastructural development, are expected to boost economic activity in the country.

However, the current limited access to foreign currency, and erratic power supply will continue to present challenges for the business.

“The business is, however, hopeful that the measures recently implemented by authorities to stabilise the local currency will create a more conducive trading environment.

“Management will continue to focus on exploring opportunities for market share growth, revenue and profitability anchored on product innovation and enhancement, production efficiencies and overhead containment,” said the company.