Home » Business » Delta Records Slump in Volumes

DELTA Corporation, Zimbabwe’s largest beverages maker said volumes for the fourth quarter to March 2014 declined 6 percent due to low consumer spending, but remained flat year on year.

Lager volumes dipped 26 percent compared to the previous comparable fourth quarter and were down 2 percent for the full year, Delta Corporation said in a full year trading update for 2014 yesterday.

The full financial results are expected to be published on the 15th of next month.

Delta, the largest company in value terms said subdued volumes reflected both softening demand and the high prices driven by high level of excise duty. Lager prices are also above the recommended levels.

“The slowdown in consumer spending and economic activity reported in the last update persisted into the fourth quarter which was characterised by rapidly declining consumer disposable income,” said Delta.

Last month, the country slumped into deflation, a phenomenon associated with downturns in the economy. The year-on-year inflation rate for the month of February, as measured by the all items consumer price index stood at minus 0,49 percent, shedding 0,9 percentage points on the February 2013 rate of 0,41 percent.

With liquidity challenges expected to persist, consumer spending is also expected to remain subdued, according to analysts. Soft drinks volume dropped 13 percent for the quarter and 2 percent for the full year. Delta said it experienced an out-of-stock situation during the quarter due to prolonged water cuts at the Harare plant.

Sorghum beer volumes were up 10 percent for the quarter and 12 percent up for the full year.

The new Chibuku Super contributed 10 percent to the overall sorghum beer volumes.

The company spent US$12 million on the expansion of its Chibuku Super plant in Chitungwiza, with annual production expected to triple to 1,8 million hectolitres.

It will be commissioned before the end of this month. Delta launched Chibuku Super in March last year after investing US$6,5 million and the product has been well-received by the customers. Delta said this was an indication of g consumer acceptance of the product.

Alternative beverages, which comprise Maheu and the new dairy-based beverages increased by 11 percent on prior year for the quarter and 33 percent for the full year.

Revenue was down 9 percent for the quarter and 1 percent for the full year.

Delta said the full year results will be “largely in line with the revenue performance”.

Source : The Herald