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Business Reporter
Delta Corporation’s revenue fell again for the second successive quarter during the period to September 30, down 5 percent, squeezed by the all-too-familiar poor consumer demand.
Revenue is down 4 percent in six months, Delta, Zimbabwe’s biggest company by market value, reported in a trading update yesterday. In the June-end quarter, revenue declined 3 percent.

Overall, beverage volume dropped 3 percent in the three months to September and 1 percent for the interim. The quarterly decline compares with an increase of 1 percent previous quarter

Low incomes are forcing consumers to dump premium priced lagers in favour of the low-end sorghum-based brew.
Delta said opaque beer sales rose 12 percent in the quarter spurred by Chibuku Super, but clear beer plunged 29 percent.

In the first quarter to June, volume rose 15 percent for sorghum while lagers crashed 21 percent. The six months figures show opaque soaring 14 percent and clear beer plummeting 25 percent, both from a year earlier.

Soft drinks extended declines from prior quarter, closing 8 percent lower during the three months to September and 6 percent below prior year.
Without providing detail, Delta said its “maheu and dairy mix beverages continue to record growth.”
Delta blamed high excise duties for negatively impacting pricing and “affordability of our products.”

The beverage maker has guided its half-year financials to September 30, 2014, due for release mid-next month, may suffer materially.
“Revenue is down . . . reflecting the notable changes in sales and product mix in favour of value propositions,” said Delta, adding “this will have a bearing on the financial performance.”
Delta Corporation is struggling to maintain volume growth seen in the few years since dollarisation due to sluggish domestic demand.

Last month, the company was forced to cut prices on its range of lagers by up to 20c in desperate measures to boost sales.
Delta said in the latest trading update it had implemented strategies to “stimulate volume and grow value.”

It hopes its $12 million capital spend on expanding the Chibuku Super plant in Chitungwiza will ramp up production of the fast-selling brew to 1,8 million hectolitres per year.
In 2013, competitor, Afdis Ltd, which produces mostly brandy and whisky, spent $5,7 million on excise duty and discounts.

Last week Afdis Ltd commissioned a new $5 million packaging plant that is expected to grow production of ciders and cut prices by up to 25 percent.
Shares of Delta closed unchanged at 125c in Zimbabwe Stock Exchange trading on Monday.

In the past 52 weeks, the stock has reached a low just over 90c and a high of 153c, outperforming the mainstream industrial index.
Delta is down 11 percent since January 2. Harare brokerage firm, IH Securities are targeting a 12-month price of 173c.