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Delta Corporation, Zimbabwe’s largest beverage company, posted a 13 percent increase in half-year operating income as robust volume growth across its domestic beer and spirits divisions helped offset tax pressures and regional weakness.
The group’s operating income climbed to US$112,2 million for the six months ended September 30, up from US$99,6 million a year earlier.
Group revenue advanced 18 percent to US$607,5 million, underpinned by double-digit volume expansion in lager and sorghum beer across its primary domestic market.
Delta, an associate of AB InBev SA/NV, benefited from relative exchange rate stability in Zimbabwe, firm mining activity, strong diaspora remittances and liquidity from the agricultural marketing season, with domestic foreign currency sales edging up to 97 percent of total revenue.
However, overall business performance remained uneven, squeezed by elevated inputs and an ongoing tax dispute.
Earnings before interest, tax, depreciation and amortisation (EBITDA) grew 13 percent to US$126,8 million, while profit before tax rose 10 percent to US$115,3 million. Basic earnings per share increased to US5,92 cents from US5,67 cents.
The board declared an interim dividend of US2,40 cents per share, representing a 20 percent increase.
Lager beer volume grew 13 percent to 1,75 million hectolitres, driven by mainstream brands and improved availability of local premium offerings such as Zambezi Lager, pushing segment revenue to US$245,3 million and operating income to US$80,3 million.
Sorghum beer volume expanded 19 percent to 2,67 million hectolitres, led by a 27 percent surge in Chibuku Super, bringing segment revenue to US$153 million.
Non-alcoholic beverages volume edged up 4,9 percent overall to 1,61 million hectolitres.
Sparkling beverages volume dipped 2 percent, hit by retail price increases stemming from value-added tax adjustments and high sugar tax costs, though Schweppes volume surged 29 percent on direct store delivery expansion.
In the wines and spirits division, African Distillers saw volume jump 35 percent, with wine up 65 percent, ready-to-drink beverages up 39 percent and spirits up 24 percent, lifting segment revenue to US$56,5 million.
Regional subsidiaries struggled as volumes dropped 22 percent at United National Breweries in South Africa due to distributor cutbacks and social unrest, while National Breweries Zambia fell 17 percent amid competition from alternative alcohol offerings, resulting in operating losses for both regional units during the period.
Delta absorbed significant cost increases in fuel, freight, polyethylene terephthalate packaging and raw materials to maintain retail price competitiveness, which constrained margin growth despite strong unit sales.
The company remains entangled in a major tax dispute with the Zimbabwe Revenue Authority, which assessed additional foreign currency income tax, value-added tax, interest and penalties of approximately US$97 million for the 2019 to 2024 periods.
“These assessments have a material impact on the group’s operations if upheld in their current form,” the company said, adding that “the ambiguities in the tax legislation remain pervasive, thereby creating risks of further disagreements in interpretations under the existing tax framework.”
Looking ahead, management noted that sustained economic policy stability and a review of fiscal measures—specifically the sugar tax—will be critical.
“Completing the capacity expansion programme and the investment in returnable glass and crates remain key priorities for the year,” Delta said.
