African Distillers Limited half year profits grow by 159% to US$7m

Zimbabwe – Zimbabwean wine and spirits manufacturer, African Distillers Limited, recorded profit after tax amounting to US$7 million during its six months to 31st December 2018 against US$2.7 million recorded in the prior year, representing a 159% increase.

The alcoholic drink manufacturer said that the remarkable performance was fuelled by increased revenues and cost containment during the period under review, reports News Day Zimbabwe.

In the six months period, the firm’s revenues skyrocketed to US$25.9 million from US$16.4 million generated in the corresponding period in 2017, representing 57% increase.

Additionally the operating income for the group was up by 130% to US$9.3 million from US$4 million, which according to Pearson Gowero, the company’s chairman, was partly driven by increasing demand experienced in the region.

“The company posted a good set of results as it continues to enjoy growth in volumes, revenues and profits despite the deteriorating macro-economic conditions.

Demand remained firm, but could not be fully satisfied due to severe foreign currency shortages,” Pearson Gowero said

Moreover, African Distillers realised growth in its total assets to US$44.6 million from US$35.6 million in 2017 while its liabilities rose to US$15.3 million in 2018 from US$14.7 million during the corresponding period under review in the prior year.

Among its segments, ready-to-drink (RTD) beverages registered the highest growth to 55% while spirits and wines followed at 25% and 22% growth respectively translating to 40% increase in its the overall volumes.

Spirits continue to dominate revenue contribution, accounting for 61%, followed by RTDs at 29% and wines contributing the balance.

“This strong performance is attributed to volume and revenue growth as well as value-chain cost management.

Expanded margins were as result of value chain distortions emanating from foreign currency shortages,” Gowero said.

However, Gowero highlighted a challenging business environment especially due to forex shortages as the major challenge limiting the company’s potential.

“The trading environment remains difficult.

However, it is hoped that the national economic reform agenda will yield positive results. Management continues to focus on business sustainability, given the foreign currency scarcity,” he said.

Earnings per share grew 155% to 6,8 cents and shareholders received an interim dividend of three cents per share.

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