Delta revenue down 6 percent as beer sales decline

Delta Corporation yesterday said revenue fell six percent in the second quarter to September 30 as demand remained depressed, although lager volumes grew five percent after value brands offset weak premier product sales.

In the six months, revenue fell eight percent after contrasting volume performances across its beverage mix for the second quarter.

“Sparkling beverages are down 14 percent compared to the same quarter last year and down 15 percent for the six months. This is partly due to increased competition particularly from imported lower priced alternative offerings,” said Delta.

“The Maheu and dairy mix beverages recorded a growth of four percent for the quarter on the back of improved product supply and the expansion of flavours.”

Despite lager beer’s quarterly growth, total volumes for the half-year fell two percent forcing the group to lower prices on September 30 to stimulate demand “with particular focus on core lager which remains in decline”.

The sorghum beer category, a profit driver in recent times, recorded a volume decline of 12 percent for both the quarter and the six months. The company noted that there is a marked shift to its Chibuku Super offering which benefited from the additional production capacity from the Fairbridge Brewery in Bulawayo.

“In the short term, there will be pressure on operating margins as we adopt strategies to address affordability and stimulate volume through price reductions and streamlining value chain costs. The benefits of these initiatives should start filtering through in the medium term,” said Delta.-The Source

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