Spirits and wines maker, African Distillers Limited’s (Afdis) says demand for its products remained buoyant but could not be fully satisfied due to the inconsistent supply of finished products owing to the unavailability of foreign currency. Performance for the half year to December 31, 2017, was however considered satisfactory as the company managed to record a 56 percent growth in profit to $2,7 million compared to $1,7 million achieved during the comparable prior year period on increased demand.
The company declared an interim dividend of 0,40 cents per share. Revenue at $16,5 million was 18 percent ahead of same period in the previous year despite the challenging economic environment characterised by foreign currency shortages. Margins improved by 6 percent due to value chain management and product mix, while operating income was 62 percent firmer to $4 million.
Gross profit for the period under review was up 33 percent to $8,8 million from $6,6 million reported in the same period last year. Chairman Pearson Gowero said the spirit segment continued to be the dominant contributor to total revenue followed by ready to drink products and wines.
The ready to drink segment grew by 2 percent over same period in the prior year although total volume fell 5 percent due to intermittent shortages. The whisky category was 7 percent firmer on the back of the newly introduced Gold Blend Black.
The cash balances were at $13,1 million, an increase of $9 million on prior year which is due to the delays in settling foreign obligations. Total assets grew 36 percent to $35 million from $26 million during the same period last year.
Despite the challenging economic environment, management is upbeat of improvements in the economy and its earnings driven by positive sentiment as Government engages the international community and focus on the ease of doing business.
Going forward, Afdis said it will put more efforts in scouting for more opportunities to improve its market share and profitability whilst maintaining consistent product supply.
“These initiatives will be anchored on product innovation, production efficiencies and cost control,” said Gowero. By close of trade on the Zimbabwe Stock Exchange yesterday, Afdis shares traded at $1,45 cents a share.