DELTA Corporation Limited has reported a 40% increase in revenue as a result of an upsurge in all its beverage categories which was driven by higher consumer demand during the first quarter of the year.
BY FREEMAN MAKOPA
In its trading update for the period under review released yesterday, Delta said the increase reflected changes in the category mix.
“Group revenue increased by 40% (34% organic growth) for the quarter reflecting the changes in category mix. All beverage categories recorded increases in revenue, which has positively impacted on profitability and cash flows,” Delta said.
Delta company secretary, Alex Makamure told NewsDay yesterday that the increase was driven by government spending through civil service bonuses.
“Our volumes increased because of high aggregate demand from agriculture, artisanal mining, government spending through civil service bonuses and command agriculture, so when people have more disposable income, they tend to enjoy themselves,” he said.
Makamure said the premiums on the black-market has also helped improve their growth as they gave consumers more spending power, especially for those who get money from diaspora remittances.
“Our prices have remained stable meaning those (consumers) selling for instance USD$100 for bond $160 there is extra cash to buy more,” he added
Part of those increases included a 56% increase in the lager beer volumes, which the company reported was up over the prior year for the quarter, matching the historical peak run rates post dollarisation.
Meanwhile, volumes at Delta’s sparkling beverages unit grew by 23% over prior year for the quarter.
Delta said the local sorghum beer volume declined by 5% mainly due to shortages of packaging materials for Chibuku Super.
“Product supply had improved by the end of the quarter. The product mix has shifted to Chibuku Super, which grew by 28% to contribute 84% of the volume,” Delta said.
Contributing to the revenue increase also was National Breweries Plc in Zambia recording a volume growth of 21% on improved product supply and competitive pricing. Delta bought a controlling stake in National Breweries in the fourth quarter of 2017.
However, Delta said while product supply was largely stable across its different segments, imported inputs remained a constraint.
“The business continues to record positive volume trends. There were significant product supply gaps arising from the shortages of imported raw materials and services, as the access to foreign currency remains constrained,” Delta said.
This affected the soft drinks category which faced challenges in securing imported raw materials, leading to extended periods of production stoppages and out of stock situations.