Delta Shrugs-Off Lockdown Hangover With Stronger Q3 Performance

Alcohol and beverages producer, Delta Corporation Limited (Delta) overcame initial lockdown hangover when it grew its revenue by 77 percent for the quarter and 33 percent for the nine months ending 31 December 2020 as production volumes increased thanks to the liberalization of foreign currency usage in the economy and partial easing of lockdown measures.

According to Delta, lager beer volume during third quarter (Q3) grew 48 percent for the quarter and 20 percent for the nine months compared to the same period last year.

“The volume recovery is attributed to the competitive pricing and consistent product supply, benefiting from the injection of new returnable glass and fewer disruptions to production operations,” said Group secretary, Alex  Makamure.

The Group endured tough first and second quarters when the initial COVID-19 lockdown measures were imposed last year in March to around August, in the process losing some of its key distribution centers.

Matters got even worse with the unavailability of foreign currency for the importation of raw materials for production.

However, the introduction of the foreign exchange auction by the Reserve Bank of Zimbabwe in June last year and the liberalization on the use of foreign currencies for domestic sales under Statutory Instrument 185 of 2020 came to the rescue.

“The Group has benefited from the improved access to foreign currency through domestic Nostro sales,” said Makamure.

In Zimbabwe the Sorghum beer volume grew 29 percent for the quarter but still trailed prior year by 14 percent for the nine months. There was improved market access following the relaxation of the lockdown measures during the quarter.

Sparkling beverages volume grew by 66 percent for the quarter and is up 42 percent for the nine months compared to prior year. The category has benefited from consistent product supply and competitive pricing.

African Distillers (Afdis) registered volume growth of 37 percent for the quarter and 25 percent for the nine months driven by the spirits and ready to drink ciders.

The beverages volume at Schweppes Holdings recovered and registered growth of 24% for the quarter but is down 2% for the nine months. The recovery is premised on improved product supply and the re-launch of the Minute Maid range of juice drinks.

However, the Group’s external units in Zambia and South Africa suffered declines in volumes.

“The volume at Natbrew Zambia declined by 2 percent for the quarter and is up 5 percent for the nine months. The category has witnessed the resurgence of illegal trading in bulk beer which trades at a discount to packaged product,”

“The South African entity, United National Breweries recorded a year on year decline of 19 percent for the quarter as South Africa has implemented very strict restrictions and bans on the sale and consumption of alcohol,” Makamure said.

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