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Martin Kadzere Senior Business Reporter
DELTA Corp, the country’s largest listed company says revenue for the full year to March 2015 declined 6 percent due to the decline in sales volumes for lagers and soft drinksBut the company sees improved demand across its product portfolio following price cuts, Delta said in a trading update yesterday. In the last quarter, turnover was 5 percent lower compared to the same period last year as consumer spending softened.
The lager beer volume declined by 3 percent during the last quarter and 17 percent in the full year, reflecting deceleration in the rate of decline compared to the preceding nine months.
The soft drinks volumes comprising sparkling and alternative beverages were down 5 percent and 6 percent for the quarter and the full year respectively, the company said.
“We report a mixed performance across the beverage categories in an environment of a contracting economy,” said Delta.
“This is characterised by constrained consumer spending, declining local manufacturing capacity and weakening regional currencies which encourages imports.”
With the general global economy outlook indicating that US is performing well, the situation has led to the appreciation of the US dollar against major currencies, which include the SA rand.
Zimbabwe is a net importer with South Africa and the depreciation of the rand has led to the reduction of the cost of imports and is reflected in the country’s inflation dynamics.
Delta said the price reductions implemented at the beginning of this year have, however, improved the affordability of its brands and should, over time, stem the volume decline.
“The recent review of prices of some brands and packs will improve the affordability and competitiveness of this product portfolio,” said the company.
The Maheu and dairy mix beverages recorded a growth of 11 percent for the full year.
This category is expected to benefit from the additional capacity commissioned in October last year, the refreshed Shumba Maheu package and the roll out of additional flavours.
The sorghum beer volume rose 6 percent for the quarter and was 8 percent above prior year for the full year. The supply of Chibuku Super improved during the quarter, attaining a contribution to total volume of about 50 percent by March 2015.
The installation of the new production facility at Fairbridge in Bulawayo is on schedule for full commissioning by July 2015. The results will be published on the 14th of next month and will reflect some loss of financial leverage due to the changes in the sales mix and the deliberate strategies to preserve volumes, said Delta.
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