Delta’s Q3 revenue down 10% as volumes remain subdued
HARARE – The rate of decline for Delta Corporation’s key Lager volumes slowed in the third quarter to December 31 but revenue fell 10% for the quarter and 9% for the nine months.
In a trading update, Delta said it had continued to experience subdued volume and revenue outturn in the quarter in spite of it being generally peak season.
“The group reports a particularly subdued volume and revenue outturn for the quarter. This is on account of depressed aggregate demand and intermittent product shortages occasioned by water supply disruptions.”
Revenue is down 10% and 9% for the quarter and the nine months’ period respectively.
Delta said Lager beer volume is 1% below prior year for the quarter and down 8% for the nine months. This reflects a slowed decline against 14% in the comparable year ago quarter. Sparkling beverages volume is down 11% for the quarter and 6% below prior year for the nine months.
“This category was adversely impacted by the increased imports from neighbouring countries which are covered by preferential trade protocols and are fuelled by the currency arbitrage opportunities”
Sorghum beer volume decreased by 4% for the quarter but up 2% for the nine months. The group said the decline in the quarter reflects the disruptions to production due to water cuts affecting the Chibuku Super plants at Chitungwiza and Fairbridge (Bulawayo). The new Chibuku Super plant at Kwekwe was commissioned in December while Masvingo is expected to start production in February 2017.
Delta is currently trading under caution with respect to the notice received from The Coca-Cola Company (TCCC) advising of an intention to terminate the Bottler’s Agreements with the group entities following the merger of AB Inbev and SabMiller and the joint Statement by TCCC and AB InBev indicating an agreement in principle that TCCC will purchase AB InBev’s interests in bottling operations in various markets.
Delta said the joint statement pronounced their strategic intent with no specific position having been reached with respect to Zimbabwe. “The board and the parties remain engaged on the matter. Shareholders will be advised timeously of any significant developments.”