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Oliver Kazunga, Senior Reporter
ZIMBABWE’S largest beverages producer, Delta Corporation says the expected 2016/17 bumper harvest is likely to bolster consumer spending this year.
Following the good rains that the country received in the 2016/17 summer cropping season, a number of companies particularly those in the agro-processing sector expect improved productivity this year.
In an audited financial statement for the year ended March 31, 2017, Delta said:
“The projected good cereals output of the 2016/17 summer cropping season, together with the expected higher volume of tobacco and cotton may shore up consumer spending. We continue to manage our overhead base in line with volume in order to deliver a positive return to shareholders”.
Although the corporation’s revenue decreased by 10 percent last year to $483 million during the period under review, the business remains profitable.
The reasons for the decline in revenue were due to mix changes in favour of the more affordable brands and packs within each category.
The Lager beer volume was down seven percent, sparkling beverages down 11 percent and sorghum beer was also down by three percent against last year.
There was a marked increase of soft drinks imports in the second half of the year while the inaccessibility of the markets from heavy rains was more pronounced on the sorghum beer volume.
During the period under review, the corporation’s board declared two interim dividends of $2 and $1 per share.
A final dividend of 2,45 cents per share was being proposed.
“This brings the total dividend for the year ended March 31, 2017, to 5,45 cents per share.
Delta said it reduced investment in working capital arising from the softening volume, delayed settlement of both foreign creditors and dividends have increased net funding to $113 million.
Following the conclusion of the combination of SABMiller and AB InBev in October last year, Delta Corporation is now an associate of the new AB InBev Group. On The Coca-Cola Company (TCCC) agreement Delta said: “TCCC issued a notice of an intention to terminate the Bottler’s Agreement with Delta Beverages and its associate Schweppes Holdings Africa Limited following the said shareholder changes. Subsequently TCCC and AB InBev reached an agreement in principle to explore options to restructure the bottling operations in a number of countries.
“The company has issued a cautionary statement in this regard. All relevant parties are engaged in discussions and stakeholders will be updated on progress,” it said.