Timothy
Business Writer
Beverages giant and Zimbabwe Stock Exchange listed entity Delta Corporation says its business will continue to benefit from the growth in consumer spending driven by agriculture, mining, infrastructural development and general commerce.
In a trading update for the third quarter ended 31 December 2021 the company said “improved access to foreign currency will enable the company to undertake critical capital investments.”
Delta has previously highlighted that the foreign currency auction system was not giving fair access to forex to all market players.
But following the expiry of SI 127, access to foreign currency has significantly improved for most businesses including Delta.
In terms of sales volumes, Delta is of the view that the upcoming by-elections will boost uptake of its products.
“The fourth quarter will witness increased political activity related to the by-elections scheduled for March 2022.”
Meanwhile, Delta said the Zimbabwe economy continues to benefit from slower inflation and increased use of foreign currency for domestic transactions which provides industry with better access to imported raw materials and inputs.
Consumer spending was spurred by increased mining activity, improved agricultural output, infrastructure projects and payments of bonuses and salaries in foreign currency, it said.
Commenting on its regional operations Delta said South Africa continued to relax the Covid-19 lockdown restrictions particularly as they relate to consumption of alcoholic beverages.
In Zambia, the Kwacha appreciated, and inflation has slowed in the post-election period. Consumer demand remains constrained under the Covid-19 restrictions.
In terms of performance for the third quarter ended 31 December 2021, Delta said revenue grew by 34 percent and 51 percent for the nine months in inflation adjusted terms compared to growth of 120 percent for the quarter and 149 percent for the nine months in historical cost terms.
“This reflects the volume recovery and replacement cost-based pricing. The group continues to leverage on the increased access to foreign currency through domestic nostro sales to contain input costs, which allows for competitive pricing,” said the group in a statement.
On volume performance, the group noted that lager beer volumes grew by 6 percentfor the quarter and 33 percent for the nine months compared to the same period last year. Product supply in the category improved, benefitting from the injection of returnable glass and improved plant reliability. There were, however, supply gaps on some brands due to global supply chain disruptions induced by Covid-19.
In Zimbabwe, the sorghum beer volume grew by 25 percent for the quarter and 50 percent for the nine months compared to prior year. Chibuku Super contributed 77 percent in the quarter.
Delta said there are ongoing interventions to unlock the capacity constraints on Chibuku Super in addition to the efforts to invigorate the standard Chibuku (Scud) product. Meanwhile, the volume at Natbrew Zambia grew by 2 percent for the quarter and was down 16 percent for the nine months.
Under sparkling beverages, Delta said the business registered a robust volume recovery to grow by 34 percent for the quarter and 62 percent for the nine months compared to prior year; reflecting market share gains driven by affordability, consistent product supply and an expanded pack and flavour offering.
Bongani Ndlovu