Delta Beverages profit rises 38% to $104m

Published: 14 May 2014

Delta beverages posted a profit of $104 million for the year ended March 31, 2014 up 38 percent from $75 million in the prior year.

According to the group's financials released today, group revenue grew by 14 percent to $631 million, which management attributed to an improved sales mix and minimal price increases.

Earnings before interest and tax grew by 37 percent leveraged by improved productivity and process efficiencies.

Most pleasing is the growth of the EBIT margin by 4,3 percent to 24,73% percent reflecting an increased retention of value generated.

Net finance costs were 78 percent below last year due to improved average cash holdings during the year.

Cash generated from operating activities increased by $44 million over prior year to $165 million. Working capital increased marginally by $5 million despite the increase in raw material stock holding to mitigate anticipated shortages and optimise operations on the back of a healthy cash position.

Capital expenditure was $83,6 million as we invested in production capacity and returnable containers. Cumulative capital expenditure since 2009 when the economy dollarised amounts to $287,5 million. Net debt stood at $3,5 million primarily due to higher cash generation.

In a statement accompanying the results, Delta chairman Caanan Dube said: The Group’s financial performance was very pleasing benefiting from a sustained focus on increased contribution of premium brands, improved productivity and margin expansion.

This strong performance was achieved in a difficult trading environment particularly in the last quarter of the financial year arising from the slow-down in consumer spending and the tight liquidity conditions in the market."

Delta's total beverage volumes of 6,9 million hectolitres were flat on prior year.

In terms of the various segments, lager beer grew 4 percent led by the premium brands. Sparkling beverages grew 9 percent supported by improved availability and higher growth on the premium convenience packages.

Sorghum beer volumes were down 8 percent, partly affected by the poor agricultural season and a raw material cost induced price increase. Maheu volume grew 42 percent on prior year benefiting from the shift from importation to local production.
- BH24

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