No festive cheer for Delta as revenue falls 10 percent

Beverage giant Delta Corporation on Monday reported a 10 percent decline in revenue in the quarter to December 31 on depressed demand and reduced production.

Delta, with a capitalisation of $1.145 billion, is the Zimbabwe Stock Exchange’s biggest stock, accounting for over a quarter of the bourse’s total market capitalisation.

The firm is an economic bellwether and its lukewarm performance over the festive season reflects Zimbabwe’s struggling economy, which the government said had registered a 0.6 percent growth in 2016.

In the nine months to December, revenue was down 9 percent compared to last year.

Quarterly lager beer volumes were down one percent on the prior year and eight percent lower over the comparable nine month period.

Sparkling beverages volumes were down 11 percent for the quarter and six percent below prior year for the nine months to December.

In a trading update today, Delta said this category was adversely impacted by increased imports from neighbouring countries.

Sorghum beer volumes decreased by four percent for the quarter but were up two percent for the nine months.

The decline in the quarter reflects the disruption to production due to water cuts affecting the Chibuku Super plants in Chitungwiza and Bulawayo, Delta said.

The new Chibuku Super plant in Kwekwe was commissioned in December whilst the Masvingo one is expected to start production in February.-The Source

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