Rival imports hit Delta H1 earnings, PAT falls 19pct to $35,7mln

Rival imports hit Delta H1 earnings, PAT falls 19pct to $35,7mln

HARARE, November 11 (The Source) – SABMiller’s Zimbabwe unit Delta Corporation on Wednesday reported a 19 percent decline in after tax profit to $35,7 million in the six months to September with volumes plummeting in the face of falling household incomes and cheaper imports.

Delta, the biggest company on the Zimbabwe Stock Exchange (ZSE) is valued at just over $1 billion, about a third of the local bourse. It said sales fell 10 percent on the prior year, driving revenue down by eight percent to $269 million.

“The sparkling beverages volume is down 15 percent on prior year. This is partly due to increased competition particularly from imported lower priced alternative offerings,” the company said.

The company, which has dominated the sparkling beverages segment said that cheaper imports –particularly the Twizza brand produced in neighbouring South Africa — were eating into its share of the market which fell to about 93 percent from 96 percent.

Sorghum beer volumes declined by 12 percent while total larger volumes were down two percent during the period.

Its maheu and dairy mix segment recorded growth of four percent on the back of improved product supply and expansion of flavours.

Finance costs were flat at $3 million while Earnings before interest, tax, depreciation and amortisation (EBIDTA) fell 16 percent to $59,4 million.

Earnings Per Share declined 19 percent to $2,89.

The board declared an interim dividend of $1,40 which is to be paid on December 9.

Delta is 38 percent owned by SABMiller — which is about to be acquired by Belgian-headquartered rival Anheuser-Busch InBev — will become part of a brewing empire that will make about one-third of the world’s beer at the conclusion of the acquisition.

“The boards of AB InBev and SABMiller are pleased to announce that they have reached agreement on the terms of a recommended acquisition of the entire issued and to be issued share capital of SABMiller by AB InBev,” said AB InBev said in a statement on Wednesday.

“The transaction will be implemented by means of the acquisition of SABMiller by Newco (a Belgian company to be formed for the purposes of the transaction). AB InBev will also merge into Newco so that, following completion of the transaction, Newco will be the new holding company for the combined group.”