Delta Beverages beer sales up 23 percent

DELTA Beverages lager volumes grew by 23 percent propped up by its massive capital investment in capacity upgrades.

The growth in Delta's lager volumes spurred overall volume growth for global brewer and part shareholder SABmiller, which holds 36,9 percent equity in the Delta.

SABMiller advised that capacity enhancements and improved availability enabled Delta Beverages to grow full year lager volumes by 23% on an organic basis. Delta also grew opaque beer volumes by 15%.

In November last year, Delta posted strong interim results for 2012 registering overall beverage sales volume growth of 23% to 3.4m hectalitres, driven by growth in lager (+30% to 0.9m hectolitre), sparkling beverages (+33% to 0.6m hectolitre), sorghum (+15% to 1.8m hectolitre) and maheu (+113%, albeit off a low base).

Sales value grew ahead of volume growth at 41%. Operating margin improved 90bps to 18.5%, slightly below expectations on increased distribution, planned repairs and maintenance costs. The margin expansion can be attributed to improved efficiencies, competitive pricing, improved product mix and supply chain management.

Delta enjoys a dominant position in Zimbabwe, commanding approximately 96% of the beer market and about 92% of the sparkling beverages.

SABMiller' Africa full year lager volumes grew by 13% on an organic basis, with fourth quarter organic growth of 14%, despite strong prior year comparatives and emerging capacity constraints in some markets.

Full year lager volumes in Tanzania grew by 15%, underpinned by a particularly strong performance in the premium segment and the positive impact of the strengthening of our sales and distribution reach and intensity.

In Mozambique, lager volumes ended 9% higher driven by enhanced penetration in the north of the country, and a strong fourth quarter assisted by the launch in November 2011 of our cassava beer Impala.

Despite capacity constraints, Zambia lager volumes grew by 17% over the full year, supported by a strong economy and growth in premium offerings.

In Uganda our extending reach into the west of the country helped deliver lager volume growth of 19%.

Capacity enhancements and improved availability enabled our associate in Zimbabwe to grow full year lager volumes by 23% on an organic basis.

Castel's full year lager volumes (excluding the successful management combination of our Angola businesses and their Madagascar acquisition) grew by 11% with good volume performances in Cameroon, the Democratic Republic of Congo, Ethiopia and Tunisia. Full year total Africa soft drinks volumes grew by 11% on an organic basis.

In South Africa, lager volumes for the year grew by 2% and were up 6% in the fourth quarter reflecting a strengthening competitive position.

The core brand portfolio overall performed well with particularly strong contributions from Castle Lite and Castle Lager. The business continued to benefit from targeted brand investments as well as improved retail execution and customer service.

Soft drinks volumes improved by 2% in the year as a result of the continued execution of focused channel plans. A good performance from the two litre PET packs and growth in still drinks, as well as favourable weather, resulted in volume growth of 13% in the fourth quarter.