Delta reports subdued trading update

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Heavy rains coupled with subdued demand saw Zimbabwe’s   beverages giant, Delta Corporation, record a 15% drop in revenue for the fourth quarter to March 2017. According to a trading update released by the company on Thursday morning, revenue  in the full year to March maintained its downward trend with the group recording a 10% drop due to depressed volumes. Management at the brewer said demand was weighed down not only by constrained aggregate demand but by the effect the heavy rains had on market access particularly on Chibuku Super and outdoor consumption occasions. “The pronounced shortages of bank notes and limited availability of alternative payment platforms also affected demand,” said the group in a trading update for Q4. According to the report, lager beer volumes were 5% below prior year for the quarter and down 7% for the full year.Sparkling beverages volume is down 24% for the quarter and 11% below prior year.”There was a marked increase in imports of soft drinks mainly from Zambia and Mozambique in the second half of the year”Sorghum beer volume is 17% down on the prior year and down 3% for the year.”The inaccessibility of certain markets was more pronounced in this category particularly in the southern half of the country,” said Delta. – Financial Express (Online)

Government says it has never defaulted on paying or liquidating Treasury Bills on maturity, pointing out that to date instruments worth $4.4 bln had been issued since 2014. In reference to funds raised by government through TBs and bonds in the last three years, Finance and Economic Development Minister Patrick Chinamasa said $1.1 bln, 25% of total, had matured and been paid. “A total of $1.102 bln (TBs) has since matured and liquidated, leaving an outstanding amount of $3.3 bln as at March 3, 2017,” he said.  The minister said that 25% of the funds raised went towards financing of government programmes and the balance to clearing legacy debts. Chinamasa made the remarks while delivering a ministerial statement on the issuance of TBs and bonds in Zimbabwe to Parliament yesterday. This came following claims from certain quarters that Treasury, which is facing financial constraints due to a challenging economic environment, may fail to honour some of its financial obligations on maturity. – The Herald, 13 April 2017

Ok Zimbabwe’s new chief executive officer Alex Siyavora says the retailer is seeing a bit of  growth from last year adding that this year is definitely better than the previous year. The activity level is higher. “The challenge we experience will always have to do with product supply because of the difficulties with international settlements. Sometimes you can go for time without certain products, but the supplier base continues to plan, react and move forward. But, yes, that is an interruption to smooth retailing,” he said. Siyavora was speaking at the launch the 29th edition of the OK Grand Challenge promotion.  OK Zimbabwe will this year offer customers loyalty points valued at $200 000 as part of the annual OK Grand Challenge Promotion which begins today. The loyalty programme comes as part of OK Zimbabwe’s strategy to hit targets which the retail organisation set for 2017. – NewsDay, 13 April 2017

Afdis is battling to source raw materials for its product range owing to an acute shortage of foreign currency on the market. Afdis MD Cecil Gombera revealed in an interview last week that the lack of forex on the market has adversely affected the production of 90% of its product range. “We are finding it extremely difficult to continue getting supplies from South Africa because we are heavily reliant on what forex the banks allocate us with to continue to do business,” Gombera said. “Our performance is therefore curtailed because we are finding it extremely difficult to ensure that we have our full range of products on the market.” He said the lack of foreign currency has affected nearly all of their products. – Independent, 13 April 2017

By |April 13th, 2017|Categories: Headlines|

About the Author:

Kudzanai Sharara
Kudzanai’s background in financial journalism with ZFN, combined with a continuing education in financial management, provide a solid grounding for his work in the research department.