Delta Corporation revenue jumps 114% on back of recovered volume sales from low prior year base

ZIMBABWE – Zimbabwe’s largest beverages maker, Delta Corporation, has registered a 114% growth in revenue in the first quarter to June 2021, in inflation adjusted terms, following significant recoveries in volumes, coming from a tight lockdown that disrupted business in the same period last year.

The manufacturer of leading brands like Castle lager, Zambezi lager, Pilsener, Coca Cola and Chibuku in Zimbabwe, said on a historical basis, total revenue was 391% better than prior year.

Delta attributed the first quarter volume recovery to a low base the group was coming from, following relaxation of restrictions imposed by the Government to contain Covid-19, which weighed down prior year volumes.

Lager beer volume for the quarter grew by 139% compared to the prior year. The volume is trending up, benefiting from competitive pricing, consistent product supply and injection of new returnable glass.

Company secretary Alex Makamure indicated that there were some supply disruptions in the product category which arose from scheduled plant maintenance and utility outages during the period under review.

Meanwhile, volumes of its Zimbabwe sorghum beer grew by 106% from last year. But there were some constraints in the supply of key packaging materials due to poor availability of and logistical challenges on resins on world markets.

“Some key trade channels such as bars and beer halls remained inaccessible under the prevailing COVID-19 regulations. The category is benefiting from the improved agricultural output and better access to rural markets,” Makamure said.

The volume at Natbrew Zambia declined by 29% for the quarter, which reflected increased competition from illegal bulk beer and the restricted access to some trade channels.

However, Delta noted signs of recovery in the Zambian operation, as the business expands its product offering.

“Some key trade channels such as bars and beer halls remained inaccessible under the prevailing COVID-19 regulations.”

Company Secretary – Alex Makamure

Its South African subsidiary, United National Breweries recorded a steely recovery, registering a promising volume growth of 361% over prior year. The business was largely closed in 2020 due to the ban on alcohol sales.

“The recovery in the South African operation has been curtailed due to the re-imposition of alcohol ban at the end of June 2021 in response to the third wave of Covid-19 infections,” Makamure noted.

The company’s wines and spirit unit, African Distillers registered a volume growth of 47% as the unit expands the route to market model to access more channels.

Sparkling beverages grew by 205% on the prior comparative and continued to recover market share, largely due to consistent product supply, increased social and economic activities driving consumption.

This is largely due to consistent product supply and the increased social and economic activities that drive consumption.

The volume includes sales into the Manicaland territory which became part of the franchise at the beginning of the quarter.

“The current focus is on injecting returnable glass bottles and supplying the full range of flavours and packages,” revealed Makamure.

Still in the soft beverage category, Schweppes volume grew by 44% on the back of improved product supply and recovery of market share in the juice drinks, as supply of juice concentrates continued to improve.

Going forward, the Zimbabwe Stock Exchange-listed manufacturer expects to it will benefit from the improved agricultural output and better access to foreign currency in the home market.

The Company foresees a return to reduced lockdown regulations and improved business activity as the country increases the vaccination rollout program.

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