Afdis earnings decline

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QUOTED beverages maker African Distillers Limited after-tax profit for the six months to June declined to $808 767 from $1,1 million recorded during the same period last year due to rising costs.

Report by Business Reporter

Earnings per share decreased to 0,85 cents from 1,2 cents.

Despite achieving growth in revenue, administrative costs rose to $1,2 million from $900 000 while distribution and other operating costs also increased.

Revenue was up 16% to $22 million from $19,5 million. The sales volume grew by 18%.

Operating income, according to the company, grew by 43% to $1,66 million from $1,16 million leveraging on improved efficiencies and cost control.

“Revenue growth was driven largely by increased sales from locally produced beverages which grew in volume by 21% to 3,2 million litres and accounted for 57,7% of total revenue,” the company said.

“Revenue growth was lower than volume growth due to unfavourable mix from imported products whose growth was largely constrained by two increases in customs duties during the year.”

The groups’ volumes were up despite an influx of cheap imports from the region.

Networking capital went up by $1,9 million and was financed by increased borrowings as the business grew.Net funding was $2,8 million.

Looking forward, the group is underpinning its growth in investing in new and modern manufacturing facilities, increasing its ready-to-drink product portfolio, improvement of production efficiencies and capabilities and cost effectiveness throughout the organisation.

The beverage sector is one of the fastest growing sub-sectors of the country’s troubled manufacturing sectors.

Capacity utilisation for the country’s manufacturing sector last year plunged to 44% from 57% in the prior year due to a host of constraints besetting the sector.