Business / Companies
Delta's 1Q revenue drops 6%
15 Apr 2016 at 06:44hrs | Views
DELTA Corporation, Zimbabwe's largest beverages company said revenue for the quarter ended March dropped 6 percent and 7 percent for the full year due to changes in portfolio mix and price moderations.
In the fourth quarter trading update released yesterday, volumes across most of its brands increased but the lagers remained depressed.
"The group's volume and revenue performance largely mirrors the subdued economic activity during the period," said the company adding that infiltration of products from adjacent markets due to the weaker regional currencies have also affected demand. It also said consumers continue to shift towards affordable brands.
Lager beer volume declined by 12 percent below prior year for the quarter and down 8 percent for the full year. Delta said it will continue to review the competitiveness of its offerings.
Sparkling beverages volume increased by 6 percent above prior year for the quarter but declined 6 percent for the full year. The Alternative beverages volume (Maheu and dairy mix beverages) grew 9 percent for the quarter compared to prior year, and is 2 percent down for the full year.
The sorghum beer volume was 15 percent up on prior year for the quarter and down 3 percent for the full year.
"The current growth is partly due to the favourable pricing on the standard Chibuku offering and the improved availability of Chibuku Super," said Delta.
In January last year, Delta reduced prices for soft drinks to spur demand and taking advantage of bond coins. It also slashed prices for its lager beers in September last year.
Analysts say the performance of Delta mirrors the continuing squeeze on disposable incomes. Even when prices of goods are generally declining, consumer expenditure has not grown due to several hindrances, manly low incomes. Priorities have also shifted as people are becoming selective of what they buy. Items like beer, particularly the premium priced lagers, will not rank at the top of the list.
The group's full year financial results are expected to be published on May 12 this year.
In the fourth quarter trading update released yesterday, volumes across most of its brands increased but the lagers remained depressed.
"The group's volume and revenue performance largely mirrors the subdued economic activity during the period," said the company adding that infiltration of products from adjacent markets due to the weaker regional currencies have also affected demand. It also said consumers continue to shift towards affordable brands.
Lager beer volume declined by 12 percent below prior year for the quarter and down 8 percent for the full year. Delta said it will continue to review the competitiveness of its offerings.
Sparkling beverages volume increased by 6 percent above prior year for the quarter but declined 6 percent for the full year. The Alternative beverages volume (Maheu and dairy mix beverages) grew 9 percent for the quarter compared to prior year, and is 2 percent down for the full year.
"The current growth is partly due to the favourable pricing on the standard Chibuku offering and the improved availability of Chibuku Super," said Delta.
In January last year, Delta reduced prices for soft drinks to spur demand and taking advantage of bond coins. It also slashed prices for its lager beers in September last year.
Analysts say the performance of Delta mirrors the continuing squeeze on disposable incomes. Even when prices of goods are generally declining, consumer expenditure has not grown due to several hindrances, manly low incomes. Priorities have also shifted as people are becoming selective of what they buy. Items like beer, particularly the premium priced lagers, will not rank at the top of the list.
The group's full year financial results are expected to be published on May 12 this year.
Source - the herald
