By Freeman Makopa
DELTA Corporation Limited has reported a 26%increase in revenue in the full year ended March 31, but the company says the numbers do not reflect a true picture of its financial performance after a change in reporting currency during the last quarter.
The beverage maker, like many other companies in Zimbabwe, is going through a difficult time after monetary authorities scrapped the discredited 1:1 US$ parity with bond notes and electronic money, merging them into a lower-value transitional currency called the RTGS dollar.
In a trading update released yesterday, Delta said the value of the RTGS$ deposits continued to be eroded by the fast depreciating exchange rates and cost-push inflation, resulting in severe decline in aggregate demand.
“The group revenue will reflect an increase of 33% for the quarter and 26% for the full year. It is noted that the financials are distorted by the changes in the reporting currency from US$ to RTGS$, noting that the group maintained stable pricing for the nine months and only partially rebased prices in the fourth quarter,” the company said.
“The full impact of the introduction of the inter-bank exchange rates on the group’s financial position is still being assessed.”
Sparkling beverage volumes declined by 89%in the prior year for the quarter and decreased by 44% for the full year due to non-availability of imported raw materials, which led to the business unit being virtually closed during the quarter.
Delta requires between $60 million and $100 million in foreign currency per annum to import critical raw materials and the sparkling beverages unit takes up at least 50% of these foreign currency requirements to pay for concentrate as well as packaging materials from external suppliers.
Last year, the company reported that it owed foreign suppliers US$41 million and was also unable to remit dividends to its foreign shareholders.
Anheuser-Busch InBev holds a significant stake in the company through South Africa’s SABMiller.
“Sorghum beer volumes in Zimbabwe contracted by 2% versus prior year for the quarter and grew by 5% for the full year. Demand for the category remains encouraging despite the cost pressures on imported packaging materials, spares and the repricing of agricultural produce,” Delta said.
Chibuku Super contributed to the total category volume.
“National Breweries Plc Zambia recorded a volume decline of 24% for the quarter and is flat on prior year for the 12 months. Product demand has reduced following some price increases and down trading to subsistence offerings,” Delta said.