ZIMBABWE – Zimbabwe based manufacturer, distributor and marketer of branded wines, ciders and spirits, African Distillers Limited (Afdis), has reported an 11% growth in volume in the half-year ended September 30, 2022.
Despite the growth, the company bemoaned the tough operating environment characterised by rising inflation, high interest rates and supply chain disruptions.
“The reduction in Zimbabwe dollar liquidity resulted in softening of demand for goods and services in supermarkets, while increasing US dollar transactions in general,” Afdis noted.
During the period, its revenue in inflation adjusted terms increased 48% to Z$ 14.9 billion (US$46.2m) while operating income increased 128% to Z$2 billion (US$6.2m).
In historic costs terms, revenue increased 369% to Z$11.4 billion (US$35.4m), while operating income increased 463% to Z$2.7 billion (US$8.3m).
Afdis pointed out that revenue growth in both inflation and historic terms was due to higher volume favourable mix and replacement cost pricing, while operating profit increased due to cost management and improved margins.
Wine volumes grew 24% driven by improved availability and affordability of some brands which are now packaged locally.
Spirit and ready to drink volumes grew 9% and 11%, respectively driven by renewed focus on direct sales distribution.
African Distillers Limited (Afdis) says it will continue to focus on product innovation, market share growth and production efficiencies amid the challenging operating environment.
The company revealed that there were opportunities for growth and these would be anchored on increased economic activity resulting from mining, agriculture infrastructural projects and next year’s harmonised elections, among others.
“The operating environment is set to remain challenging, with uncertainty on power supply and inflation. There are, however, opportunities for growth anchored on increased economic activity resulting from mining, agriculture infrastructural projects, the forthcoming elections and COVID-19 restrictions.
“The company will continue to focus on product innovation, market share growth, production efficiencies and cost containment measures despite the challenging environment,” Afdis said in its financial statement.
Last month the drinks maker re-launched its revamped Gold Blend Black Whisky, and in recent months, it started packaging a number of brands locally that it used to import.
Afdis is a subsidiary of Zimbabwe’s largest beverage company, Delta Corporation, which registered a 55% growth in revenue in the first quarter ended 30 June 2022.
The rise in top-line performance is attributed to growth in sales volume and the replacement cost-based pricing.
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