Afdis volumes decline 35pc
ZIMBABWE Stock Exchange-listed wine and spirit maker African Distillers (Afdis) says business outlook for the company remains bleak as hyperinflation, poor agricultural season and the continued foreign currency shortages impact negatively on business performance.
According to the company’s half year financial results, volumes for the half year ended December 31, 2019, the company registered a volume decline of 35 percent compared to the same period last year.
“The future remains uncertain given the ongoing shortage of foreign currency, hyperinflation and poor agricultural season. This will impact negatively on volume and margin performance.
“The company will continue to explore strategies designed to best serve the market and ensure business continuity,” Afdis chairperson Pearson Gowero said.
He added that consumer trends had shown a shift from premium and mainstream segments to value products in reaction to the erosion of disposable incomes.
Performance of the spirit segment was negatively impacted by the prevalence of counterfeits and illicit alcoholic beverages.
The group recorded a profit of $10,9 million from $37,9 million registered in the previous half year period.
Revenue grew by 25 percent to $223 million from $178 million recorded in the prior comparable period and operating income for the half year period increased by 15 percent from $54,4 million in the prior comparable period to $62,7 million.
The macro-economic conditions in Zimbabwe continue to deteriorate, further reducing consumer disposable incomes and compromising product demand for companies like Afdis and as a result companies continue to seek opportunities to protect market share and enhance shareholder value,
The board therefore recommended an interim dividend of 10 cents per share, amounting to $11,7 million in an attempt to retain shareholder value.
“Notice is hereby given that the board of directors declared an interim dividend, number 90, of 10 cents per share payable in respect of all the qualifying ordinary shares of the company. This dividend is in respect of the half year ended December 31, 2019.”
Afdis manufactures the bulk of the products it markets which include the Savanna and Hunters cider brands, Gold Blend Whisky, Harrier Whisky, Chateau, Viceroy and Heritage Brandy, gin, rum, vodka as well as sparkling and fortified wines.
The company operates six depots in Bulawayo, Harare, Kwekwe, Masvingo, Mutare and Victoria Falls.