Delta Q3 revenue down 7pc

Business Reporter
DELTA Corporation’s revenue for the nine months to September 2015 decreased by 7 percent, weighed down by falling volumes across the beverage maker’s major product lines.

In a trading update for the period under review, the country’s largest manufacturer of beverages said revenue was also 5 percent down for the quarter due to changes in the portfolio mix and price moderations in the year to boost demand.

The Zimbabwe Stock Exchange listed beverage maker, manufacturer of Castle, Zambezi, Pilsner and Lion lagers said that it will continue to implement strategies to retain customers.

“Group revenue is down 5 percent for the quarter and 7 percent for the nine months to September, reflecting changes in the portfolio mix price moderations during the year,” Delta said.

Lager volumes for the quarter to September declined by 14 percent compared to the same period last year, reversing nascent recovery registered the prior quarter of the nine months in review.

Sparkling beverages volumes were flat on prior year for the quarter and down 9 percent for the nine months to September, despite brief increase in demand driven by high temperatures.

“The alternative beverage (maheu and dairy mix beverages) recorded a decline of 7 percent for the quarter compared to prior year, mainly due to supply challenges in November.

The alternative beverage category is 50 percent below prior year.”

Sorghum beer volumes, just like sparkling beverages, were also flat for the quarter compared to same period the prior year and 8 percent down for the nine months period to September.

“The category continues to benefit from customers drifting from other alcohol alternatives and the increased Chibuku Super, which remains in short supply,” the brewer said in the update.

Delta’s revenue for the half year to September 2015 declined 8 percent to $269 million due to changes in the portfolio mix and price moderation.

Group CEO Pearson Gowero told analysts last year that benefits of these initiatives to stimulate volume should have an impact in the medium term.

He said Delta was feeling the pressures of the difficult trading environment where consumers are stressed, with fewer people on regular income after widespread job losses as a result of court a ruling allowing firms to lay off on three months’ notice.

Mr Gowero also said that the strong dollar had increased imports from the region, which compete against the group’s products. Escalation in power cuts have also disrupted production and restricted cold availability, which impacted on volumes.

Overall, volumes were down 10 percent to 3,2 million hectolitres as all beverage categories experienced a decline in volumes.

Sparkling beverages were the worst hit, declining 15 percent to 605 000 hectolitres .

Sorghum beer was down 10 percent to 1,79 million hectolitres.

Clear beer declined 2 percent to 682 000 hectolitres.

Delta said alternative beverages were down 4 percent to 89 000 hectolitres for the 2015 half year period.

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