Delta H118 earnings jump on increased lager sales

Delta Corporation Limited Group says its profitability and cash flows had improved in the half year to September 30 helped by 33% jump in earnings.
In a trade up date, Delta said its top line jumped 33% (30% organic growth) for the quarter and 37% for the half year driven by the volume growth in the beer businesses.
This growth positively impacted on profitability and cash flows in the period under review. But the group did not hint at the bottom line growth.
“The Company today issues an update for the second quarter and the half year ended 30 September 2018. The business performance reflects the relative impact of the import content requiring hard currency in each business segment. Consumer demand has been firm due to increased economic activity in mining and agriculture, expansionary fiscal and monetary policies and the election related spending. The Company has maintained stable retail prices since 2013,” the company said.
“Post the end of the reporting period, the fiscal and monetary policy pronouncements have been dampened by the currency policy statements which seem to contradict the previous undertakings by the Reserve Bank of Zimbabwe on the multicurrency framework. In addition the 2% transaction tax took both business and consumers by surprise, raising policy risks and undermining market confidence.”
The company lager beer volumes grew by 52% in the period under review and rose 54% for the six months.
Delta said the business had responded well to the surge in demand with volume outturn surpassing historical peaks.
“There are some frictional shortages of brands and packs occasioned by the limited production capacity and raw material supply issues,” the company said.
Its sorghum beer volumes in Zimbabwe grew by 9% above prior year for the quarter and 2% for the six months.
The production capacity for Chibuku Super is now fully extended while for standard Chibuku is limited by the shortages of Scud bottles.
National Breweries Plc – Zambia (Natbrew Plc) recorded a volume growth of 13%, in response to the volume recovery initiatives which focus on packs and competitive pricing.
“The Sparkling beverages volume declined by 14% compared to prior year for the quarter and grew by 3% for the six months. The category was adversely affected by the challenges in securing imported raw materials, leading to extended periods of production stoppages and out of stock situations,” the company said.