By Jonathan Mbiriyamveka
Listed Delta Corporation Limited’s Lager beer volume for the first quarter ended 30 June 2021 grew by 139% compared to the same period last year despite volume performance which were significantly curtailed by the onset of hard lockdowns in response to Covid-19 during the first wave.
The high growth rates recorded in Zimbabwe for the first quarter of F22, in comparison to prior year, partly arises from the low prior year base.
In an update, Company Secretary Alex Makamure said there were some supply disruptions arising from scheduled plant maintenance and utility outages.
“The volume is trending up, benefiting from competitive pricing, consistent product supply and the injection of new returnable glass.
“In Zimbabwe, the Sorghum beer volume grew by 106% for the quarter compared to prior year. 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 beerhalls 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.
He said the volume at Natbrew Zambia declined by 29% for the quarter.
“The performance reflects the increased competition from illegal bulk beer and the restricted access to some trade channels.
“There are signs of recovery as the business expands its product offering. United National Breweries South Africa registered 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 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,” he said.
The Sparkling Beverages volume, he said, grew by 205% for the quarter compared to the prior year as the business continues to recover market share.
“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. African Distillers Limited (Afdis) registered a volume growth of 47% for the quarter as the unit expands the route to market model to access more channels.
“Market supply was affected by the shortages of key imported ingredients. Schweppes Holdings Limited recorded a beverages volume growth of 44% for the quarter on the back of improved product supply and recovery of market share in juice drinks. The supply of juice concentrates continues to improve,” he said.
Group revenue grew by 114% for the quarter in inflation adjusted terms and by 391% in historical cost terms.
This reflects the volume recovery across all beverage categories off a low prior year base.
The historical cost figures reflect lower and less frequent price increases in line with a more stable exchange rate and lower inflation in Zimbabwe.
The Group benefited from improved access to foreign currency through domestic nostro sales although this was disrupted somewhat due to the unintended consequences of the policy change under statutory instrument 127 of 2021.
There are cost disparities arising from the wide exchange rate margins.
Makamure said the Company would continue to review its responses to the COVID-19 pandemic based on the best available medical and safety protocols with a focus to avoid and reduce transmissions of the disease through its activities.
There is a resurgence of COVID-19 infections in waves driven by virulent and transmissible mutations of the virus.
“This results in the re-imposition of various levels of lockdowns and restrictions on business activities, particularly those related to trading or consumption of alcoholic beverages.
“The roll out of vaccines provides hope that countries will attain herd immunity that will allow a return to normal levels of social and economic activity.
“There are many uncertainties that make it difficult to fully estimate the full impact of the COVID-19 pandemic on the financial health of the Company and Group entities,” he said.
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