Delta H1 revenue down 8pct, fails to remit $30mln in dividends

Delta H1 revenue down 8pct, fails to remit $30mln in dividends

HARARE, November 9 (The Source) – Beverage manufacturer Delta Corporation on Wednesday reported revenue of  $246,6 million, eight percent down on the prior year as most of its segments recorded lower volumes on the back of depressed consumer spending.

Lager beer volume was down 11 percent on prior year as demand shifted to traditional beer and other cheaper alcohol offerings while volumes for Sparkling beverages dropped by three percent.

Sorghum beer volumes increased by six percent on prior year while contributing 60 percent to total revenue.

Operating income was down nine percent to $39,4 million and earnings before interest, tax depreciation and amortisation (EBITDA)  was eight percent lower at $54,9 million, reflecting lower revenues.

Chief executive Pearson Gowero said the contribution of Chibuku Super remains strong but decried the  cash crisis, which he said delayed the commissioning of two new Chibuku Super plants.

“The delay in paying foreign suppliers has resulted in late commissioning of the new plants at Masvingo and Kwekwe which are now expected to contribute to production before the end of the calendar year,” said Gowero.

The company saw a decline in share of profit of associates to $351,000 in the first half to September 30 from $1,463 million last year.

Gowero also noted that while the shortage of foreign currency spurred demand of local products, it  is significantly impacting the the company’s ability to source critical raw materials.

Delta also said it had failed to pay up to $30 million in dividends to its foreign investors as a result of delays by local banks to settle foreign payments.

Zimbabwe is in the throes of an acute shortage of banknotes, with the authorities planning  to introduce a token currency in the form of bond notes.

Government has prioritised repatriating profits and dividends to foreign investors.

Delta finance director Mathlogonolo Valela on Thursday told an analysts briefing that local banks were having difficulties in processing international payments.

“We still owe major shareholders some dividends from last time because banks have delayed payments and we owe foreign creditors,” he said.

“We have  a foreign loan of about $30 million from Mauritius which falls due in the next 15 months but we are taking measures that should resolve the issue.  We will never allow our creditors to be exposed to that extent but this is not something we can control.”

Delta declared a dividend of $57 million for the full-year to March 2016.

The board declared an interim dividend of two cents per share, totalling $25,8 million to be paid in December.

Delta’s major shareholders are Anheuser-Busch InBev SA/NV with a 38,2 percent stake, Old Mutual 14,1 percent and Templeton Asset Management , 3,45 percent.