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Delta in Complete Beverage Takeover Following 114% Revenue Growth – Patricia Murambinda

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Delta Coorporation General Manager Co-orporate Affairs Ms Paticia Murambinda says Zimbabwe’s largest beverages maker, registered a 114 percent growth in revenue for the first quarter to June 2021, in inflation adjusted terms, on volumes recovery driven by relaxed Covid-19 restrictions.

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

But Delta noted that the resurgence of Covid-19 infections driven by virulent and transmissible mutations had resulted in the re-imposition of various levels of lockdowns and restrictions on business activities.

In what Delta felt may once again negatively impact the recovering volumes, the group said the fresh restrictions affect business activities, particularly those related to trading or consumption of alcoholic beverages.

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.

In a first quarter trading update prior volumes were significantly curtailed by hard lockdowns imposed by the Government in light of the deadly pandemic.

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

In Zimbabwe, the sorghum beer volume grew by 106 percent 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.

Speaking to TechnoMag, General Manager ms Patricia Murambinda said

”We usually do not conduct interviews on our trading updates. Full presentation on our results is done to analysts at half year results publication and full year by our CEO and FD.”

The Update from Delta shows The volume at Natbrew Zambia declined by 29 percent 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.

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

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

African Distillers Limited (Afdis) volume growth of 47 percent as the unit expands the route to market model to access more channels. Market supply was affected by the shortages of key imported ingredients.

At Schweppes beverages volume grew by 44 percent for the quarter on the back of improved product supply and recovery of market share in the juice drinks, as supply of juice concentrates continued to improve.

The roll out of vaccines provides hope that countries across the world will attain herd immunity national level, which will allow a return to normal levels of social and economic activity.

In the outlook, businesses in Zimbabwe will benefit from the improved agricultural output and better access to foreign currency while mass vaccinations will allow a return to reduced Covid-19 restrictions and improved business.

He said nascent recovery in the Zimbabwe economy was negatively impacted by the dent in confidence in the use of foreign currency for domestic transactions arising from the policy interventions under Statutory Instrument 127 of 2021.

Delta believes there are pricing disparities arising from the wide margins between the official and market exchange rates.

The company said Zimbabwe has recorded growth in consumer disposable incomes, due to higher economic activity, driven by infrastructure spending, growth in agricultural output and increased mining activity.

In South Africa, Delta said the level of economic activity had increased in line with the easing of lockdown restrictions with output showing strong signs that things were inching up.

In Zambia, the economy experienced resurgent inflation and currency depreciation ahead of the general election scheduled for 12 August 2021. But consumer demand in that market remains constrained.

Ross Moyo

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