Zimbabwe Stock Exchange (ZSE) listed AfDis posted an inflation adjusted net profit after tax of $22,4 billion for its half year ended September 30, 2023, representing a 988 percent rise from the comparative 2022 period.
In the period under review, operating income increased by 311 percent to $28 billion, while gross profits surged 219 percent to $68,5 billion.
The increased profits were supported by a 156 percent rise in total revenues, which hit $134 billion and this was attributed to growing volumes, a favourable sales mix, and replacement cost-based pricing. The group placed its USD revenue at US$25,7 million for the period.
Among the company’s market segments, spirits showed the sharpest revenue growth at 170 percent to $80,9 billion as volumes increased by 8 percent, with firm demand on the affordable range.
The RtD segment saw revenue growth of 139 percent to $47,1 billion following volume growth of 14 percent despite competition from lower priced smuggled imports. Revenue from wine sales increased by 114 percent to $8,7 billion as volumes increased by 7 percent.
Economist Tinevimbo Shava said, “On the face of it, it is a largely positive set of results for African Distilleries. The moderate growth in volumes across the board is notable, given the period under review falling under a tight liquidity environment.”
It appears that the company benefited significantly from the increased dollarization, which enhanced its capacity to maintain consistent supplies both to formal and informal markets.
“This increased forex business has also seen significant improvement in the company’s profitability and profit margins. Going forward, with a reasonably secure working capital position, the outlook for the company is stable.
“Increased dollarization of salaries and a relatively stable local currency should drive further moderate volume growth in the second half of the year. Although the ongoing power supply challenges present significant downside risk,” Shava concluded.