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Business Reporter
BEVERAGES maker, Delta Corporation, reported a 15 percent fall in revenue for the fourth quarter to March 31, 2017 on weak volumes across its product range.
Delta said the quarter was characterised by depressed demand due to low consumer spending as cash shortages persisted.
“The fourth quarter recorded particularly depressed volumes and revenue out turn,” said Delta in a trading update for the quarter.
“In addition to the constrained aggregate demand, the out turn was impacted negatively by heavy rains that reduced market access and outdoor consumption occasions.
“The pronounced shortages of bank notes and limited availability of alternative payment platforms also affected demand,” said Delta.
Delta said its revenue was 10 percent lower for the full year. Sparkling beverages volumes fell 24 percent in the quarter and 11 percent below prior year for the full year due to competition from imports.
Imports have been cited as one of the key challenges affecting local industry’s competitiveness as they are usually priced lower than locally manufactured goods.
“There was a marked increase in imports of soft drinks mainly from Zambia and Mozambique in the second half of the year,” said Delta.
Lager beer volume weakened 5 percent below prior year for the quarter and 7 percent for the full year as the market shifts to cheaper options.
Despite commissioning new Chibuku Super plants in Kwekwe and Masvingo which stabilised supply, sorghum beer volumes fell 17 percent on prior year for the quarter and down 3 percent for the full year.
The sorghum beer segment has been performing well following introduction of the Chibuku Super in 2012 and consumers’ shift towards the more affordable brand.
However, the brand was negatively affected by weather patterns which made certain markets inaccessible due to incessant rainfall experienced in some parts of the country, which resulted in flooding in some instances.
The beverages giant’s full year financial results are expected to be released on May 11.
Online Reporter