Delta  sales down buoyed by sorghum beer faces problem paying dividends

Beverage manufacturer Delta Corporation yesterday reported revenue of $246.6 million, eight percent down on the prior year as most of its segments recorded lower volumes on the back of depressed consumer spending.

Lager beer volume was down 11 percent on prior year as demand shifted to traditional beer and other cheaper alcohol offerings while volumes for Sparkling beverages dropped by three percent.

Sorghum beer volumes increased by six percent on prior year while contributing 60 percent to total revenue.

Operating income was down nine percent to $39.4 million and earnings before interest, tax depreciation and amortisation (EBITDA)  was eight percent lower at $54.9 million, reflecting lower revenues.

Chief executive Pearson Gowero said the contribution of Chibuku Super remains strong but decried the  cash crisis, which he said delayed the commissioning of two new Chibuku Super plants.

“The delay in paying foreign suppliers has resulted in late commissioning of the new plants at Masvingo and Kwekwe which are now expected to contribute to production before the end of the calendar year,” said Gowero.

The company saw a decline in share of profit of associates to $351 000 in the first half to September 30 from $1.463 million last year.

Gowero also noted that while the shortage of foreign currency spurred demand of local products, it  is significantly impacting the company’s ability to source critical raw materials.

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