Afdis registers 56% revenue growth

Zim Now Writer

African Distillers Limited has reported 56% to ZWL$41 billion revenue growth in inflation adjusted terms, while operating income increased by 15% to ZW$5.4 billion.

In historical cost terms, revenue increased by 418% to ZWL$34.2 billion while operating income increased by 316% to ZWL$7.5 billion.

In its 2023 annual report, African Distillers Limited attributed revenue growth to increased volume and cost containment measures, which were in place over the period.

Volume growth was strong at 18% above prior year mainly driven by Ready to drink segment, which grew by 23%.

Wines and Spirits volumes grew by 16% and 14% respectively.

The increase in volume was due to improved product availability, increased market penetration and promotional activity.

Africa Distillers Limited Board Chairman Matts Valela however, said the company experienced cost pressures in distribution, fuel and power, payroll and maintenance.

“Measures introduced by the government to reduce ZWL$ liquidity resulted in relatively stable foreign exchange rates except at the tail end of the year where accelerated depreciation was witnessed, resulting in increased value chain costs.

“The market witnessed an increased USD transaction flow, particularly from the informal sector, which helped in sustaining the Company’s working capital requirements.

“Acquisition of Distell Ltd by Heineken BV. The acquisition of a major shareholder and partner, Distell Ltd by Heineken BV has been approved and implemented with effect from 26 April, 2023.

“The Company continues to receive support from Distell in line with the existing franchise and technical arrangements,” he said.

It is anticipated that no adverse changes will arise from the acquisition.

Meanwhile, the company’s board has recommended a final dividend of US$0.0050 per share, amounting to US$593,137.

An interim dividend of US$0.0025 per share was paid in December 2022, bringing the total dividend to US$0.0075 per share.

In order to give context to the financial results, the board estimates that, in United States dollars terms, revenue increased by 15% to US$49.4 million and operating income was at US$8.5 million.

Valela added that the trading environment is envisaged to remain challenging and uncertain with anticipated for business growth.

“The Company will continue leveraging on ensuring full product availability, market share protection and brand portfolio expansion for business growth.

“Focus will also be on production efficiencies and cost containment initiatives,” he added.