LISTED beverages producer Delta Corporation saw its revenues for the third quarter to December 31, 2016, slide 10 percent due to weak volumes experienced during the period.
Revenue was also down nine percent for the nine-month period to the end of December.
The weak volumes in lager, sparking beverages and sorghum beer volumes were at odds with “expectation” as Delta’s third quarter falls within the festive season, which would normally result in an upturn in consumption of the company’s products.
Management attributed the weak performance to “depressed aggregate demand” and “product shortages” during the period under review.
“The group reports a particularly subdued volume and revenue out-turn for the quarter. This is on account of depressed aggregate demand and intermittent product shortages occasioned by water supply disruptions,” said Delta in a trading update yesterday.
The company said lager beer volumes were one percent below prior year for the quarter and eight percent weaker over the nine-month period.
Sparkling beverages volume declined 11 percent for the quarter and six percent below previous year performance for the nine-month period.
“This category was adversely impacted by the increased imports from neighbouring countries, which are covered by preferential trade protocols and are fuelled by the currency arbitrage opportunities,” said Delta.
Sorghum beer volume decreased by four percent for the quarter but up two percent for the nine-month period to the end of December 2016.
“The decline in the quarter reflects the disruptions to production due to water cuts affecting the Chibuku Super plants at Chitungwiza and Fairbridge (Bulawayo).
“The new Chibuku Super plant at Kwekwe was commissioned in December while Masvingo is expected to start production in February 2017,” it said.
The group also reminded shareholders that the “company is trading under a cautionary issued with respect to the notice received from the Coca-Cola Company (TCCC) advising of an intention to terminate the Bottler’s agreements with the group entities.”
It follows the combination of Anheuser-Busch InBev SA/NV (AB InBev) and SabMiller Plc and an announcement by TCCC and AB InBev stating an agreement in principle that the former will purchase the latter’s interests in bottling operations in various markets.
Delta maintains that “no specific position” has been reached with respect to Zimbabwe in this matter. — BH24
Article Source: The Chronicle