Delta squeezed: Soft drink imports see group revenue drop
A COMBINATION of soft drink imports, cash shortages and inaccessibility of markets due to heavy rains frustrated Delta Corporation’s operations resulting in reduced revenue in the last quarter and full year to March this year.
In a trading update for the period ended March 31, 2017 issued yesterday, Delta Corporation reported group revenue dropped by 15 percent and 10 percent for the quarter and the full year respectively.
The giant beverages maker attributed the decline to a number of macro-economic constraints that eroded earnings.
“The fourth quarter recorded a particularly depressed volume and revenue outturn. In addition to the constrained aggregate demand, the outturn was impacted negatively by heavy rains that reduced market access and outdoor consumption occasions.
“The pronounced shortages of bank notes and limited availability of alternative payment platforms also affected demand,” said Delta.
The company’s lager beer volume was five percent below prior year for the quarter and seven percent down for the full year.
Sparkling beverages volumes also dropped by 24 percent for the quarter and 11 percent below prior for the full year.
“There was a marked increase in imports of soft drinks mainly from Zambia and Mozambique in the second half of the year,” reads the report.
Similarly, the group’s sorghum volume tumbled by 17 percent on prior year for the quarter and down three percent for the full year.
Delta said the inaccessibility of certain markets was more pronounced in the sorghum beer unit, particularly in the southern region, which covers mainly Matabeleland provinces, Masvingo and the Midlands.
The company, however, reported the supply of its Chibuku Super had stabilised following the commissioning of the new plants at Masvingo and Kwekwe.
Meanwhile, the listed company reminded shareholders that it was trading under caution on the back of a notice received from The Coca-Cola Company advising of an intention to terminate the Bottler’s Agreement with the group’s entities.
It said a further update will be issued when the full year results are published on the 11th of next month.