LEADING beverages producer, Delta Corporation, has recorded an 8% decline in revenue for the first half of the year due to changes in product mix and pricing decisions.
BY TARISAI MANDIZHA
In a statement yesterday, Delta Corporation said revenue went down 6% during the first quarter and 8% for the six months.
“The trading environment continues to be constrained by depressed consumer spending, limited access to cash and the generally weak macro-economic performance,” the group said.
“Trading patterns remain inconsistent. The shortages of foreign currency resulted in reduced importation of consumer goods leading to an increase in demand for some of our product lines.
“There is an emerging risk on water supply due to depleted dam and ground water sources. This is causing production disruptions.”
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In the period under review, lager beer volumes increased by 4% for the quarter and 6% for the six months.
“The contribution of Chibuku Super remains strong. The delays in payments for foreign suppliers resulted in the late commissioning of the new plants in Masvingo and Kwekwe, which are now expected to contribute to production before the end of the calendar year,” the group said.
Early this year, Delta said annual profits during for the full year ended March 2016 dropped by 12% to $80 million, from $92,8 million the previous year, after turnover slipped by 7% amid spending pressures.
Operating income retreated by 14% to $96,1 million, from $111,1 million the previous year, as volumes tracked weak consumer demand and a general economic slowdown.
The group said lager volumes declined by 8%, while sparkling beverages and sorghum beer also slowed.
The group said it will commission its Masvingo plant this month and has also moved the commissioning of the Kwekwe plant to a later date due to delays in the delivery of equipment by suppliers.
The two plants were undergoing a $14,5 million apiece upgrade.
The upgrade will see Delta producing four million hectolitres annually of beer.