HomeBusinessNo Xmas cheer as Delta revenue dips 10% in Q3

No Xmas cheer as Delta revenue dips 10% in Q3

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Beverages manufacturer, Delta Corporation has seen its revenue down 10% in the third quarter ended December 31, 2016, due to suppressed demand and shortages caused by water supply disruptions.

BY BUSINESS REPORTER

In a trading update yesterday, Delta said revenue was down 9% for the nine months ended December 31.

“The group reports a particularly subdued volume and revenue outturn for the quarter. This is on account of depressed aggregate demand and intermittent product shortages occasioned by water supply disruptions,” the beverages manufacturer said.

The quarter ended December 31 normally records brisk business as it includes the festive season.

Delta said lager beer volume was 1% below prior year for the quarter and down 8% for the nine months.

Sparkling beverages volume was down 11% for the quarter and 6% below prior year for the nine months.

“This category was adversely impacted by the increased imports from neighbouring countries which are covered by preferential trade protocols and are fuelled by the currency arbitrage opportunities,” Delta said.

Sorghum beer volume decreased by 4% for the quarter, but was up 2% for the nine months.

The brewer said the decline in the quarter reflected the disruptions to production due to water cuts affecting Chibuku Super plant at Chitungwiza and Fairbridge (Bulawayo).

Delta said the new Chibuku Super plant in Masvingo was expected to begin production next month.

The Kwekwe plant was commissioned in December.

At an analysts briefing in November, Delta’s chief executive officer, Pearson Gowero said water shortages were affecting the business and the situation was more pronounced in October, adding that the company could not import water.

“There is not enough processed water and as a business, it’s a major risk. We are doing everything possible, we have water reservoirs. Beyond that, we cannot give any guarantee,” he said.

Delta warned of disruptions to production due to depleted dam and ground water sources.

The business requires about four times more water to produce one litre of any of its beverages, with lager beer requiring about six times.

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