Cash shortages: Delta revenues drop in response
LISTED beverages producer Delta Corporation saw its revenue for the period ended September 30, 2016, slide eight percent to $246 million from $269 million previously.
This was on the back of a dip in the volumes of most of the group’s segments as consumer spending waned during the period.
“The trading environment continues to be constrained by depressed consumer spending, limited access to cash and the generally weak macroeconomic performance,” said chairman Mr Canaan Dube in a statement accompanying the results.
“The shortage of foreign currency, though supporting demand for local products, is significantly impacting on the sourcing of critical raw materials.”
Lager beer volume was down 11 percent on prior year as demand shifted to traditional beer and other cheaper alternatives. Volumes for Sparkling beverages were down by three percent during the period under review.
Sorghum beer volumes increased by six percent on prior year and contributed 60 percent to the group’s total revenue. Operating income was down nine percent to $39,4 million and earnings before interest, tax depreciation and amortisation (EBITDA) was eight percent lower at $54,9 million, reflecting lower revenues.
Management said net finance income results from higher cash holdings were tempered down by lower interest rates. The board has declared an interim dividend of two cents per share. — BH24.