Sorghum beer sales lift Delta
ZIMBABWEAN brewer Delta Corporation, which is 25%-owned by SABMiller, says it has seen a marginal rise in revenue in the second quarter, largely driven by sales of its Chibuku beer.
ZIMBABWEAN brewer Delta Corporation, which is 25%-owned by SABMiller, said in a trading update yesterday it had seen a marginal rise in revenue in the second quarter of its financial year ended September, largely driven by sales of its sorghum-based Chibuku beer.
Quarterly revenue rose 3% compared with the September quarter the previous year, and 5% for the six months ended September from the corresponding period last year. Delta did not provide monetary figures in yesterday’s update, only percentage changes in sales. It will publish its results on November 14.
Delta’s sales reflected a slowdown in Zimbabwe’s economy, with volumes for Chibuku rising while lager beer sales volumes declined, independent economist Moses Moyo said yesterday.
“Disposable incomes are declining and the cost of living is rising and this has an impact on Delta’s revenue from lager beer. The company’s product mix has always provided for cover; in the event of a decline in lager beer, Chibuku, which is much aimed at the lower end of the market, will provide some respite,” he said.
Delta controls nearly 90% of the lager beer market in Zimbabwe although it is now facing increasing competition from imported beer brands and spirits. Its soft drinks unit has also had to put up with the rising distribution of imported beverages such as Pepsi and 7 Up, which are being distributed mostly from Zambia.
The company said yesterday that Zimbabwe’s economy continued to be characterised by weak consumer demand. The Consumer Council of Zimbabwe (CCZ) said yesterday that the cost of living for a family of six had marginally increased, to $567.
“Consumer demand has remained generally soft, a trend that has been evident since the beginning of the calendar year,” Delta said.
“The overall financial performance for the quarter and the half-year is in line with our expectations,” the company said.
The update showed beverage volumes across its product mix rose 4% for both the quarterly and half-year period to end-September. Delta is due to present its halfyear results next month.
“Lager beer has continued to decline and is down 12% to the prior year for the quarter and 10% for the six months.”
The company received a sales volumes boost from its Chibuku brand. It said its sorghum beer had “registered a growth of 13% for the quarter” and about 9% for the half-year.
The nonalcoholic beverages segment also drove overall volumes for the company, with sparkling beverages rising 4% for the quarter to end-September and 8% for the half-year period.
The opaque sorghum-based but nonalcoholic traditional beverage, Maheu, recorded the biggest increase in volume after jumping 42% over the prior-year quarter and 57% over the previous corresponding half-year period.
Revenue from sorghum brews, which comprised 60% of sales in Delta’s beer category in the year ended March, rose 9% in the six months ended September 30 from a year earlier. Sales of sparkling beverages climbed 8% in the first half, Delta said.