Rutendo Nyeve, Sunday News Reporter
AFRICAN Distillers Limited (Afdis), a leading manufacturer and distributor of wines, spirits and ciders, is optimistic about the future of its business after recording impressive half-year performance results.
The Zimbabwe Stock Exchange-listed company anticipates that a normal agricultural season, coupled with increased activity in mining, tourism and infrastructure development, will stimulate economic growth and positively impact its operations.
In their recent half-year period ending September 30, 2024, Afdis recorded an 11 percent volume growth, translating to a seven percent revenue increase, reaching US$26,2 million.
This was revealed in the company’s Unaudited Financial Information for the half-year ended 30 September 2024 released last Thursday.
In his statement, Afdis Chairman Mr Matlhogonolo Valela said the company recorded volume growth of 11 percent compared to the prior period, mainly driven by the Ready to Drink (RTD) and wine segments, which grew by 22 percent and 13 percent respectively.
“RTD volume was influenced by promotions and the successful launch of a new product, NightSky Gin and tonic, which was well received by the market. The wine category benefitted from improved availability of affordable wines and intensified focus on direct sales distribution. The widespread distribution of cheaper and illicit spirits curtailed the category’s growth.
“Revenue grew by seven percent to US$26,2 million due to increased volume. Operating income, at US$1,5 million, was lower than the prior year partly due to thinner margins from price reductions meant to counter competition from illegal imports. In addition, the differences in approaches used in deriving prior year United States dollar numbers together with the distortions in exchange rates and inflation indices during the same prior period makes comparison difficult,” said Mr Valela.
He said while the current limited access to foreign currency might be presenting business challenges, the company is hopeful that various measures being implemented by the Government to stabilise the local currency will improve the trading environment.
Afdis Chairman Mr Matlhogonolo Valela
“The forecast of a normal agricultural season, increased activity in mining, tourism and infrastructural development are expected to boost economic activity in the country. The current limited access to foreign currency and erratic power supply will continue to present challenges for the business.
“The business is however, hopeful that the measures recently implemented by authorities to stabilise the local currency will create a more conducive trading environment. Management will continue to focus on exploring opportunities for market share growth, revenue and profitability anchored on product innovation and enhancement, production efficiencies and overhead containment,” said Mr Valela.
Turning to the macro-economic environment for the period under review, Mr Valela said it was generally stable in the first quarter after the introduction of the new ZWG currency.
However, he said there was a significant depreciation of the local currency in the second quarter resulting in price distortions in formal trade. — @nyeve14
