Afdis revenue jumps 81 pc

WINES and spirits maker, Afdis' revenue for the year to March 31, 2022, rose 81 percent to $8,7 billion compared to $4,8 billion recorded in the nine months to March 31 in the prior year on solid demand.

The financials cover a 12-month period from April to March whilst the comparable period covers a nine-month period from July to March as Afdis changed its financial year last year from June 30 to March 31 to align with Delta, which acquired additional shareholding, resulting in Afdis being a subsidiary.

According to the group, the growth in revenue was a result of firm demand which drove volumes.

Volume increased 36 percent during the period under review driven by wines and ready to drink (RTDs) segments which rose 65 percent and 50 percent respectively.

However, during the last quarter of the year, growth in RTD segment was slowed by regional shortages of glass, which led to supply shortages.

The Hunters' brand was the worst affected. Afdis highlighted the group was making efforts to widen its glass supply base to minimise product shortages.

During the period under review, the business faced challenges emanating from counterfeit and illicit spirits putting a strain on the business' price competitiveness.

This is in addition to other macro-economic challenges that have been affecting local businesses such as currency volatility, inflationary pressures, limited foreign currency as well as the adverse impacts of the Covid -19 pandemic on disposable incomes and supply chains.

“The operating environment for the reporting period was relatively stable except at the end of the financial year when the economy experienced significant foreign exchange volatility.

“Resultantly, value chain costs increased necessitating frequent price reviews. Covid19 restrictions impacted negatively on glass supply from South Africa thereby affecting our ability to meet demand on some brands in the final quarter,” said the group in a statement accompanying the results.

Afdis, however, is benefiting from the foreign currency trades which are boosting liquidity for the company making it easier to fund external supplies of raw materials and capital equipment.

Afdis said: “The ability of the business to continue trading in foreign currency helped in sustaining the company's import requirement.”

While the business environment is expected to remain challenging, Afdis indicated various mitigatory measures had been put in place to keep the business sustainable.

Management maintains its focus on revenue and profitability growth opportunities through product innovation, market share protection, production efficiencies and cost containment.

The group is also working on capital projects to localise some imported products.