African Distillers Limited Sees 15% Turnover Increase – Exploiting Opportunities to Grow Revenue and Profitability

Published On: July 25, 2023Company: African Distillers Limited (AFDS.zw)
What measures is African Distillers Limited putting in place to increase revenues and profits?
African Distillers Limited is implementing measures to exploit available opportunities, sustain market share, revenue, and profitability growth. This includes product innovation, production efficiency, and cost containment measures. Additionally, by trading in a multi-currency environment, the company has enabled itself to meet its foreign currency working capital requirements.

Operating Environment

  • Characterised by significant local currency volatility, high-interest rates, and power supply outages
  • Government instituted measures to stabilise the economy (foreign currency exchange liberalisation and taxpayer payment in local currency) resulting in tightened liquidity
  • Shift from formal retail chain stores to smaller traders with USD currency increasing
  • Trading in multi-currency environment enabled company to meet foreign currency working capital

Volume Performance

  • Company registered 11% volume growth above prior year
  • Ready-to-Drink (“RTD”) segment grew by 26% due to improved product availability
  • Spirits volume grew by 1%
  • Wine category volume declined by 13% due to competition from cheaper imports and reduced consumer traffic

Financial Performance

  • Revenue for quarter grew 143% in inflation adjusted terms and 808% in historic cost terms
  • In USD, turnover grew by 15% to 12.5 million
  • Revenue growth driven by increased volume and inflation related adjustments

Outlook

  • Economic environment presents opportunities for business growth
  • Measures being taken to exploit available opportunities, sustain market share, revenue, and profitability growth
  • Focus on product innovation, production efficiency, and cost containment

Useful links

About African Distillers Limited (AFDS.zw)

African Distillers Limited founded in 1944 is a Zimbabwean company in the beverages sector. It is the sole manufacturer and distributor of traditional, flavored, and blended spirits. African Distillers Limited is listed on the Zimbabwe Stock Exchange and is known for its diverse range of product offerings and high-quality manufacturing processes. The Company has six depots in Bulawayo, Harare, Kwekwe, Masvingo, Mutare and Victoria Falls.

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