Judith Phiri, Business Reporter
WINE and spirits producer, African Distillers Limited (Afdis) recorded an 18 percent increase in volumes for the year ended 31 March 2023, mainly driven by the company’s ready to drink (RTD) line which grew by 23 percent.
The company’s wines and spirits volumes also grew by 16 percent and 14 percent respectively. In a trading update, Afdis said the increase in volume was due to improved product availability, increased market penetration and promotional activity.
“In inflation-adjusted terms, revenue increased by 56 percent to $41 billion whilst operating income increased by 15 percent to $5.4 billion.
In historical cost terms, revenue increased by 418 percent to $34,2 billion whilst operating income increased by 316 percent to $7.5 billion,” reads part of the update.
Afdis said revenue growth was driven by increased volume and cost containment measures which were in place over the period.
However, cost pressures were experienced in distribution, fuel and power, payroll and maintenance. The company said in order to give context to the financial results, the board estimates that in United States dollar terms, revenue increased by 15 percent to US$49.4 million and operating income was at US$8.5 million.
“Users need to exercise caution when using these US$ figures given the challenges in determining the US$ numbers in the current environment.”
Afdis said the trading environment was envisaged to remain challenging and uncertain, however, it was also anticipated that there will be opportunities for business growth.
The company said it will continue leveraging on ensuring full product availability, market share protection and brand portfolio expansion for business growth.
While, focus will also be on production efficiencies and cost containment initiatives.
In terms of the acquisition of a major shareholder and partner, South African wine and spirits company, Distell Limited, by a Dutch brewer, Heineken Beverages the transaction was approved and implemented with effect from 26 April 2023.
“The company continues to receive support from Distell in line with the existing franchise and technical arrangements. It is anticipated that no adverse changes will arise from the acquisition.”