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BizDay Zimbabwe

Afdis H1 profit up 46 percent to $1,9 mln on local cider production

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Wine and spirit maker African Distillers (Afdis) reported a 46 percent increase in profit to $1, 9 million in the six months to December 2014 compared to the same period last year on improved volumes.

Revenue for the period was $13, 7 million from $12, 7 million recorded in the previous year as locally produced ciders augmented the company’s overall performance.

Gross sales grew by 13 percent to $20, 8 million on a volume growth of 20 percent.

“Operating income at $2, 6 million grew by 29 percent on prior year. This is attributed to value chain cost reduction initiatives and favorable Rand exchange rate movement over the period,” said Afdis chairman Joe Mutizwa in the financial report published on Thursday.

Net finance costs at $37,000 were 81 percent below last year due to reduced borrowings and an improved working capital position.

The company declared an interim dividend of 0.21cents per share.

Afdis is targetting to grow sales leveraging on the growth of the locally produced ciders and maintain its current spirit market share.

It is also aiming for increased profitability through cost management and improved production efficiencies.

South Africa’s Distell and Delta jointly own Afdis Holdings, which controls 60,50 percent of the locally listed distiller. Other shareholders include Old Mutual Life Assurance, Stanbic Nominees and the Mining Pension Fund.

Its performance contrasts sharply with Zimbabwe’s largest beverage maker, Delta, whose revenue for the third quarter to December was down 10 percent on weakening demand for its product mix.

Lager beer volumes for the third quarter to December were down nine percent on weakening consumer spending while soft drink volumes for the period fell five percent, prompting the company to issue a profit warning.

Sorghum beer, which lately had shown strong volume growth, was down one percent due to constrained brewing capacity and utility outages.

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