Afdis reports 157pc earnings growth

15 Feb, 2019 - 00:02 0 Views
Afdis reports 157pc earnings growth Pearson Gowero

eBusiness Weekly

Enacy Mapakame
Spirits and wines maker, African Distillers Limited’s (Afdis) profit for the six months to December 2018, jumped 157 percent to $7 million from $2,7 million achieved prior year comparative and 34 percent ahead of full year profit. The firm attributed the growth to increase in volumes that surged up 40 percent.

Profit before tax came in at $9,7 million representing a 157 percent growth while operating income increased 130 percent to $9,3 million.

Earnings per share grew 155 percent to 6,08 cents and the company declared a dividend of 3 cents per share.

“This strong performance is attributed to volume and revenue growth as well as value chain cost management,” said chairman Pearson Gowero in a statement accompanying the company’s financials.

Revenue for the period went up 57 percent to $25,9 million. The spirit segment continued to be the dominant contributor to total revenue followed by ready to drink and wines.

Spirits and ready to drink products accounted for 61 percent and 29 percent respectively, while wines contributed the balance. Ready to drink segment registered a 55 percent growth while spirits were 25 percent above the comparative period. Wines increased 22 percent.

Market watchers are of the view that ready to drink products will continue to grow or remain stable on strong demand especially from the ciders division.

These are mainly for the upper middle class and analysts believe this market has not been badly affected unlike other beers such as lagers where the market can downgrade to other cheaper options in line with waning disposable incomes.

Total assets grew 25 percent to $44,6 million from comparable period’s $35,6 million and 11 percent ahead of full year to June 2018.

Despite the challenging economic environment characterised by limited foreign currency, management is upbeat of improvements in the economy and its earnings.

Afdis will put more emphasis on its business sustainability in the face of limited foreign currency, which has affected several businesses in the country.

“Trading environment remains difficult, however, it is hoped that the national economic reform agenda will yield positive results. Management continues to focus on business sustainability given the foreign currency scarcity,” said Gowero.

Peers, Delta have been affected by foreign currency shortages to enable them to buy concentrate as well as for packaging. This has led to supply shortages particularly in the sparkling beverages segment that was severely apparent during the festive season.

The beverages firm registered its first movement this year and by close of trade Wednesday it was pegged at $1,56, on the Zimbabwe Stock Exchange, representing a 2,05 percent increase YTD.

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