eBusiness Weekly
Enacy Mapakame
Spirits and wines maker, African Distillers Limited (Afdis), revenue for the six months to September rose 48 percent to $14,9 billion on the back of growth in volumes across segments as demand remained stable.
The growth was achieved despite a challenging environment characterised by inflationary pressures resulting in waning disposable incomes. However, US dollar transactions in supermarkets were on an increase during the period under review.
“The trading environment for the period under review was challenging, characterised by rising inflation, high interest rates and supply chain disruptions. The Government introduced initiatives to reduce local currency liquidity and stabilise the exchange rate in the last quarter.
“The reduction in Zimbabwe liquidity resulted in the softening of demand for goods and services in supermarkets whilst increasing US dollar transactions in general trade,” said Afdis chairman Matts Valela.
Operating income for the period increased by 128 percent to $2 billion compared to $0,9 billion recorded during the same period last year. In historic cost terms, revenue increased by 369 percent to $11,4 billion whilst operating income increased by 463 percent to $2,7 billion.
“Revenue growth in both inflation and historical terms was due to higher volume, favourable mix and replacement cost-based pricing while operating profit increased due to cost management and improved margins,” said Valela.
A profit before tax of $1,8 billion was recorded from $529 million achieved in the same prior year period. Profit for the period surged 233 percent to $584 million compared to $175 million recorded during the same period last year. Basic earnings per share rose 238 percent to 497 cents from 147 cents achieved during the same period in 2021.
At $14,8 billion, total assets were 38 percent ahead of the same period last year. In terms of volume performance, the company recorded a volume growth of 11 percent compared to the prior year. According to the group, wine volume grew by 24 percent driven by improved availability and affordability of some brands which are now packaged locally.
Spirit and Ready to Drink (RTD) volumes grew by 9 percent and 11 percent respectively driven by renewed focus on direct sales distribution. While the operating environment is expected to remain the same characterised by foreign currency shortages, exchange rate volatility, inflationary pressures and erratic utilities supplies, the increased activity in the mining and agriculture sectors gives hope for businesses.
“The operating environment is set to remain challenging, with uncertainty on power supply and inflation. There are however opportunities for growth anchored on increased economic activity resulting from mining, agriculture, infrastructure projects, the forthcoming elections and relaxed Covid 19 restrictions.
“The Company will continue to focus on product innovation, market share growth, production efficiencies and cost containment measures,” said Valela.
