Delta Reaps Forex Auction Dividends

Beverages giant, Delta Corporation, says policy interventions on the foreign currency market have paid dividend for the firm as third quarter performance showed significant volumes recovery.

According to the group, the liberalisation of the use of foreign currency for local purchases as well as the RBZ auction system, which improved access to foreign currency resulting in stable pricing and consistent product supply paid dividends.

In a trading update for the period, Delta indicated total revenue rose 77 percent and 33 percent for the year to date inflation adjusted terms.

Company secretary Mr Alex Makamure attributed the revenue gains to improved volumes across all divisions.

“Group revenue grew by 77 percent for the quarter and 33 percent for the year to date in inflation adjusted terms and by 784 percent and 837 percent in historical cost terms for the quarter and year-to-date, respectively.

“This reflects the significant volume recovery across all beverage categories and attention to replacement cost based pricing,” he said.

Mr Makamure said volumes for lager beer segment grew 48 percent for the quarter and 20 percent for the nine months compared to the same period last year on the back of competitive pricing and consistent product supply.

Sparkling beverages volumes grew by 66 percent for the quarter and up 42 percent for the nine months compared to prior year.

According to the group, the category benefited from consistent product supply and competitive pricing.

Local sorghum beer volume went up 29 percent for the quarter but still trailed prior year by 14 percent for the nine months due to the negative impacts of Covid-19 induced lockdown.

Said Mr Makamure: “The sorghum beer category was negatively impacted by limited access to trade channels such as bottle stores and rural markets in the first half of the year.”

At Natbrew Zambia, volumes eased by 2 percent for the quarter and rose 5 percent for the nine months. The category has witnessed the resurgence of illegal trading in bulk beer, which trades at a discount to packaged products.

The South African entity – United National Breweries – recorded year-on-year decline of 19 percent for the quarter as South Africa implemented a ban on the sale and consumption of alcohol.

“The total ban on alcohol sales was re-imposed at the end of December 2020. The sales mix has shifted towards take-home packs in response to the restrictions on gatherings,” said Mr Makamure.

African Distillers (Afdis) registered volume growth of 37 percent for the quarter and 25 percent for the nine months driven by the spirits and ready-to-drink ciders.

Schweppes Holdings also registered recovery recording a growth of 24 percent for the quarter but down 2 percent for the nine months.

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