eBusiness Weekly
Enacy Mapakame
Spirits and wines maker, African Distillers Limited (Afdis), says volumes for the first quarter to September 30, 2020 jumped 28 percent compared to the same period last year on the back of good sales mix.
According to the group, a favourable sales mix which favoured higher valued spirits also largely contributed to a good revenue performance.
During the three months under review, spirits and Ready-To-Drink (RTD) volumes grew 43 percent and 24 percent respectively.
Afdis’ trading update for the quarter, however, shows that wines declined by 38 percent over the last prior year quarter comparative. In terms of financial performance, revenue for the first quarter increased 15 percent to $456 million in inflation adjusted terms, while in historic terms it grew ahead of inflation to 884 percent compared to the same period in prior year.
While the whole world has been battling effects of Covid-19, there has been a general stability in the economy especially with regards the exchange rate during the quarter under review. Businesses have generally acknowledged and applauded this stability brought by the auction system to make the limited foreign currency available to businesses in a more transparent manner.
“There was a general improvement in the trading environment characterised by a stability in exchange rates and prices of goods and services.
“The ability of customers to settle in foreign currency and the foreign currency auction system have brought the well needed relief to the industry and the economy at large. The Company was able to meet all its demand and satisfy the market requirements owing to the improved foreign currency supply,” said Afdis in a trading update for the quarter under review.
Prior launch of the foreign currency auction system, the economy experienced exchange rate fluctuations which had a negative impact on businesses as prices of God and services constantly went up in life with the exchange rate on the illegal parallel market.
This was worsened by the Covid-19 outbreak which also negatively impacted the economy in the quarter under review as restrictions and prohibitions on travel and social gatherings affected overall demand.
The easing of lockdown restrictions has however stimulated demand and sales volumes for businesses as trading hours as well as access to markets also improved.
While the full impact of the pandemic can not be ascertained yet, the company had indicated it will continue to put measures to mitigate its spread in line with the Government and WHO protocols whilst ensuring business continuity.
In the outlook period, the performance of the group will largely depend on the general performance of the economy. Said Afdis: “The performance of the economy is largely dependent on the consistency of monetary and fiscal measures put in place by the authorities however management will continue to focus on protection of market share, innovation and cost management to enhance shareholder value.”
