Delta Corporation Limited Records 13% Growth in Lager Beer Volume to 2.46 Million Hectolitres in 2024

Published On: August 6, 2024Company: Delta Corporation Limited (DLTA.zw)
Question: What are the main challenges faced by the Delta Corporation regarding its operations in Zimbabwe?
Answer: Delta Corporation is challenged by the complex economic environment in Zimbabwe characterized by currency instability and rising inflation. It's also grappling with ongoing tax disputes with the Zimbabwe Revenue Authority, which could significantly influence the company's viability. Additionally, the company had to adapt to shifts in consumer behavior and the effects of significant policy interventions.

Summary

  • The Zimbabwean economy has continued to experience policy shifts in response to currency and inflation developments, including adopting increased foreign currency use for domestic transactions and implementing significant policy interventions.
  • Consumer spending remains high due to stable US dollar pricing, wage enhancements, and election-related spending.
  • Different factors contribute to the economy including mining activities, marketing of commercial crops, government infrastructure development and diaspora remittances.
  • Major expansions in production capacity were undertaken in the past year to support growth and improve customer service.
  • The financial results were presented in US dollars, following the change of reporting currency on 1 October 2023.
  • The Group reported revenue of US$768 million, reflecting a growth of 43% over the prior year, and an operating income of US$152 million, a 53% growth increase over the prior year.
  • A volume growth was observed across the Lager Beer, Sorghum Beer, Sparkling Beverages, Wines and Spirits, and Nampak Zimbabwe sectors.
  • Tax disputes with ZIMRA are ongoing, with potential assessments having a significant impact on the Group’s viability.
  • The economic outlook in Zimbabwe remains complex due to currency instability, inflation, and political challenges.
  • The company has prioritized sustainability goals, focused on responsible alcohol consumption, waste and pollution reduction, and resource utilization optimization.

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About Delta Corporation Limited (DLTA.zw)

Delta Corporation Limited manufacturers and markets international and locally-produced beverages in Zimbabwe. It operates in four segments: non-alcoholic beverages, sparkling beverages, lager beers and traditional beers. Brands in its non-alcoholic range are a flavoured maize drink called Shumba Maheu, and a flavoured drinking yoghurt called Supersip Yogurt. The sparkling beverages division operates two bottling plants and one canning plant; bottling and distributing popular cool drink brands sold worldwide by the Coca-Cola Company, a range of drink mixes and an energy drink called Burn. The lager beer division operates two breweries; bottling and distributing international brands such as Castle Lite, Miller’s, Peroni, Redds, Brutal Fruit and Sarita. Delta Corporation Limited has a monopoly in the traditional beer market in Zimbabwe with 14 breweries located across the country; brewing and distributing a well-known sorghum beer brand called Chibuku. Other subsidiaries have interests in transport and logistics, barley and sorghum malting, food processing, packaging, retailing wines and spirits, recycling, tin can production and leadership training. Delta Corporation Limited is listed on the Zimbabwe Stock Exchange

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Giri

Giri, our AfricanFinancials AInalyst, was born in 2006. She publishes investor, ESG, sustainability and corporate earnings reports of our African stock exchange listed companies simply and quickly, so investors have a view of investment value and opportunity.

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