NewsDay (Zimbabwe)

Delta beer sales rise 48% over festive holidays

.... prioritise­s settlement of legacy debts

- BY TATIRA ZWINOIRA Follow Tatira on Twitter @tati_tatira

DELTA Corporatio­n Limited (DCL) says improved local foreign currency sales helped the firm to deal with part of its legacy debt in line with arrangemen­ts with the Reserve Bank of Zimbabwe (RBZ).

As of September 30, 2020 DCL had legacy foreign liabilitie­s of US$47,8 million which were supposed to have been paid by February 22, 2019, but were not due to exchange rate disparitie­s and shortages of foreign currency.

As a result, DCL registered these liabilitie­s with the RBZ as legacy debt and made savings bond deposits as full cash cover in line with directives RU102/2019 and RU28/2019 and as agreed with the central bank.

“The group has benefited from the improved access to foreign currency through domestic nostro sales,” DCL company secretary Alex Makamure said in a trading for the quarter and nine months ended December 31, 2020 report released this week.

“The foreign currency is being prioritise­d towards settlement of the legacy debts in line with the arrangemen­ts with the Reserve Bank of Zimbabwe. Steady progress has also been made in the settlement of the loan for the acquisitio­n of UNB (SA).”

The increased domestic foreign currency generation on the market and better efficiency of the forex auction contribute­d to the improved access to foreign currency through domestic nostro sales.

In its financial report for the half year ended September 30, 2020, DCL reported that the foreign liabilitie­s were matched by a financial asset of $3,7 billion representi­ng the legacy debt cash cover deposited with the RBZ.

DCL added that borrowings included $2,6 billion covered by the legacy debt arrangemen­t with the RBZ and $2,1 billion being the loan for the acquisitio­n of United National Breweries in South Africa to improve the former's foreign currency generation.

Capital expenditur­e of $385 million, was below planned replacemen­t levels due to forex constraint­s, according to the September report.

“The Zimbabwe economy benefited from the stability of the foreign currency auction system and liberalisa­tion on the use of foreign currencies for domestic sales under Statutory Instrument 185 of 2020. The improved access to foreign currency has resulted in stable pricing and consistent product supply due to better access to imported raw materials and spares,” Makamure said in the report under review.

“Consumer disposable incomes remain constraine­d due to restricted economic activity under COVID-19 conditions. There were positives from the payment of year-end bonuses, increased mining activity and infrastruc­ture projects that are injecting liquidity into the market.”

The group revenue grew by 77% for the quarter and 33% for the year to date in inflation adjusted terms and 784% and 837% in historical cost terms

for the quarter and year to date respective­ly.

While domestic generation improved, DCL’s external generation was weighed down during the period under review.

Lager beer volumes grew by 48% for the quarter and 20% for the nine months

compared to the same period last year.

The volume recovery is attributed to competitiv­e pricing and consistent product supply, benefiting from the injection of new returnable glass and fewer disruption­s to production operations.

Sorghum beer volumes grew by 29% for the quarter, but still trailed the prior year by 14% for the nine months. Sparkling beverages volumes grew by 66% for the quarter and is up 42% for the nine months compared to prior year.

 ??  ?? Lager beer volumes grew by 48% for the quarter and 20% for the nine months compared to the same period last year
Lager beer volumes grew by 48% for the quarter and 20% for the nine months compared to the same period last year

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