EFE Securities •

11 months ago •

Company Papers

Delta Earning Update

Strong volumes in lager and sorghum beer beverages spur 
group revenues…
Strong demand in lager and sorghum beer beverages drove  volumes up 12% to see revenue rise by 60% to close at  $536.92bn. Operations improved in the year under review as  EBITDA and operating profit surged by an identical 29% to  close at $99.79bn and $112.60bn respectively. The group  reported that they are generating 67% of their revenue in US  Dollars giving them a buffer on imported raw materials. The group’s PBT closed at $87.34bn after accounting for share of  profit of associates while, share of profit of associates fell by  74% to $452m. The income tax expense totaled 24.19bn  closing with $63.14bn profits which represent a 11% margin on revenue, PAT grew by 29% compared to the previous  period. The NAV also firmed 42.11% to $184.9996 on the back  of the groups profits. Delta’s balance sheet as at year-end  stood at $402.72bn with equity of $239.51bn, while  operations managed to increase by 57.64% to generate  $59.02bn in cash flows over the year.

Operating Activities
Sorghum beer
Sorghum beer volumes in Zimbabwe grew by 9% to 4.072m Hectoliters(HLS) as the launch of Chibuku Super Banana flavor lifted the volumes. Other factors that drove volumes in the sorghum segment were improved supply of scud and utilization of available regional capacity to cover supply. Zimbabwean sorghum beer still faces challenges of water,
electricity outages and poor market access due to bad road network. Chibuku brand boasts of a 92% market share in Zimbabwe. South Africa recorded a 12% growth to 1.47m
(HLS) anchored by penetration into more distribution channels, driving new product offering and reopening of a 3rd brewery at Butterworths. Zambia’s volumes rose by 28% to 875(HLS) due to optimization of production facilities and good offtake of scud and chibuku super banana. The Zambian segment is being affected by cost pressure from depreciating Kwacha.