Cash short­ages: Delta rev­enues drop in re­sponse

Chronicle (Zimbabwe) - - Business Chronicle -

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.

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