Afdis re­ports de­cline in full year profit

Chronicle (Zimbabwe) - - Business Chronicle -

LISTED spir­its maker, African Dis­tillers (Afdis) has re­ported a 64,51 per­cent de­cline in full year profit to $1,1 mil­lion from $3,1 mil­lion pre­vi­ously.

This was on the back of re­duced rev­enue and earn­ings for the year ended June 30, 2016.

Rev­enue for the pe­riod amounted to $22 mil­lion down 14 per­cent from $25 mil­lion in the prior com­pa­ra­ble pe­riod.

Man­age­ment at­trib­uted the vol­umes de­cline to the neg­a­tive per­for­mance of the rev­enue side.

“The de­cline in the high con­tribut­ing spir­its had an over­all neg­a­tive ef­fect on rev­enue per­for­mance

“This de­cline was fur­ther com­pounded by price re­duc­tions aimed at stim­u­lat­ing de­mand to main­tain com­pet­i­tive­ness” said the chair­man, Mr Pear­son Gowero in a state­ment ac­com­pa­ny­ing the re­sults.

Op­er­at­ing in­come was 32 per­cent be­low prior year due to the de­cline in rev­enue and mix which was in favour of lower value prod­ucts.

Earn­ings per share de­creased sig­nif­i­cantly from 2,75 cent to 0,97 cents due to re-or­gan­i­sa­tion costs amount­ing to $0, 905 mil­lion and an im­pair­ment of $0,109 mil­lion re­sult­ing from gazetting of Spring­vale Es­tate, said Mr Gowero.

The spir­its pro­ducer said its work­ing cap­i­tal im­proved dur­ing the pe­riod un­der re­view, which re­sulted in an in­jec­tion of $2,6 mil­lion into oper­a­tions. The com­pany’s bor­row­ings of $1,9 mil­lion were ex­tin­guished dur­ing the fi­nan­cial year that has just ended.

Go­ing for­ward, man­age­ment says it would fo­cus on iden­ti­fy­ing rev­enue growth ini­tia­tives as well as strength­en­ing the on-go­ing cost-cut­ting mea­sures.

The Afdis board has rec­om­mended a fi­nal div­i­dend of 0,30 cents per share re­sult­ing in a to­tal div­i­dend of 0,45 cents per share for the year. — BH24

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