dyton mupawaenda
Business Reporter
Delta Corporation has reported a 3 percent contraction in its total beverage volumes for the 12 months ending March 2025, dropping to 10,8 million hectolitres from the previous year’s 11,141 million hectolitres over the same period the prior year.
The decline deepens to 6 percent when factoring in its associate company Schweppes Limited, with total volumes falling to 11,7 million hectolitres from 12,2 million hectolitres, the company said in a presentation to analysts yesterday.
The performance summary indicates a segmented performance, with gains in some areas offset by drops in others.
While the lager beer category grew by 2 percent, the sorghum beer segment declined across regional markets, most notably a 30 percent plummet in Zambia and a 10 percent decrease in South Africa.
Sorghum beer volumes in the domestic Zimbabwe market saw a marginal 1 percent uptick.
Sparkling beverages experienced a 4 percent drop, while alternative beverages registered a 29 percent growth.
Schweppes experienced challenges primarily due to the sugar tax, which led to a price hike and a surge in imports of Mazoe Orange Crush from regional markets in the first half of the year, capitalising on price differentials.
While there was some moderation in pricing following a reduction in the sugar tax in January 2025, the business also faced disruptions in the route to market stemming from fiscal regulations.
Delta said it would mitigate these negative impacts through strategic interventions such as promoting low and zero-sugar options and implementing price moderations to retain consumers.
African Distillers, Delta’s wines and spirits unit, emerged as a strong performer, recording a notable 14 percent volume increase.
Key among the drivers is the increased compliance with recommended retail prices, which has likely contributed to a more stable and predictable pricing environment within the formal trade channels.
Furthermore, the ongoing anti-smuggling campaign appears to have effectively curbed the influx of informal imports, thereby channelling more consumer demand towards formally distributed African Distillers products.
The company’s strategic focus on expanding its Ready-to-Drink (RTD) portfolio has also yielded positive results.
The recent launches of NightSky Gin and Tonic and the larger Hunters 660ml returnable glass bottle pack have successfully tapped into evolving consumer preferences, further driving volume growth within the Afdis segment.
However, this was overshadowed by a significant 15 percent volume decline in Schweppes, contributing substantially to the overall negative trajectory when associates are included.
During the period, Delta reported a 4,6 percent revenue growth, reaching US$807,5 million from US$767,9 million.
The introduction of the sugar tax necessitated price increases for maheu and soft drinks, which the company attempted to offset through a price moderation strategy across its product range.
Profitability was pressured by an increased cost of trade discounts linked to route-to-market tax regulations, coupled with an under-recovery of the sugar tax and elevated imported maize costs.
Furthermore, the company incurred an exchange loss due to currency devaluation, impacting its monetary assets as of September 2024.
Operating income remained relatively flat, slightly decreasing from US$152,3 million to US$152,6 million.
Online Reporter