Zimbabwe: Delta Corporation’s annual profit surges by 59.2%

Delta Corporation’s profit surged by 59.2 percent to US$100,5 million in the full year to March 31, 2024 from US$63 million in the comparative period the prior year after revenue jumped by 43 percent to US$767.6 million, The Herald reported on May 17.

Operating income came in at US$152.3 million in 2024 against US$99.7 million in the same period last year. Earnings before interest, tax, depreciation and amortisation (EBITDA) jumped to US$166.9 million against US$112.6 million in 2023.

Delta attributed the surge in revenue primarily attributed to record sales in the larger beer segment and significant growth across other key product lines.

Lager beer remained the cornerstone of Delta’s revenue, contributing US$318 million in the fiscal year 2024, a 43 percent rise from the US$222,9 million recorded in the same period the prior year. This segment alone accounted for 41.45 percent of the total group revenue.

The impressive growth in the lager beer segment was driven by increased volumes, which hit an all-time high of 2.5 million litres, a 13 percent increase from the 2.2 million litres sold in the previous year.

Delta’s sorghum beer business also posted robust growth, with revenue rising 40 percent to US$250.8 million from US$179.7 million. This segment made up 32.68 percent of the total group revenue for the year. The growth in this segment was supported by both local and international demand.

Locally, sorghum beer volumes increased by 3 percent to 4.2 million litres. In foreign markets, consumption soared after a 33 percent increase to 1.2 million litres in Zambia and a 3 percent rise to 1.5 million litres in South Africa.

The sparkling beverages segment outperformed all other product lines in terms of growth rate. Revenue from sparkling beverages increased by 59 percent to US$146.7 million, up from US$92 million in the previous year, contributing 19.11 percent to the total group revenue.

The volume of sparkling beverages sold also saw a significant uptick, rising 29 percent year-on-year to 2 million litres from 1.6 million litres in 2023.

In the wines and spirits category, Delta recorded a revenue of US$51.8 million, marking a 26 percent year-on-year increase. This steady growth further solidified Delta’s diversified portfolio, though it accounted for a smaller portion of the overall revenue compared to the other segments.

Overall, the four key segments – namely lager beer, sorghum beer, sparkling beverages, and wines and spirits – contributed a combined 99.97 percent to the total group revenue, up from 99.81 percent in 2023. The remaining segments experienced a significant decline in revenue, dropping 76 percent to US$261 000 from US$1.1 million in the prior year.

Delta chairman, Mr Sternford Moyo, in a statement accompanying results, said the group undertook capital expenditure across all product lines during the year under review. Cumulative investments over the past two years were about US$100 million.

“The group commissioned significant production capacity expansion projects during the current year to support volume growth and to improve customer service.

“These include the lager beer glass packaging line at Southerton Brewery, a PET packaging line at Graniteside, the Chibuku Super plant at Harare Brewery and a Chibuku Super plant at Phelindaba Brewery in Pretoria,” he said.

“Afdis commissioned a new PET line, refrigeration equipment and a bottle washer whilst Schweppes Zimbabwe installed a high-capacity PET line among other key projects.

These investments are complemented by the injection of glass bottles, coolers, informal market equipment, additional distribution fleet and ICT equipment.”

Delta’s strong performance was underpinned by increased volumes across all its segments. Besides the record-breaking lager beer sales, Delta’s associates also reported positive volume gains.

Schweppes, one of Delta’s key associates, saw an 11 percent increase in volume to 892 million litres, while AFDIS recorded a modest 1 percent growth to 161 million litres.

The company’s strategic focus on expanding its market reach and enhancing production efficiency has paid off handsomely. The growth in the sorghum beer segment, particularly in foreign territories such as Zambia and South Africa, underscores Delta’s successful penetration into new markets and its ability to cater to varying consumer preferences.

The company has demonstrated resilience and adaptability in a challenging economic environment, leveraging its strong brand portfolio and robust distribution network to achieve record financial results.

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