Africa Distillers revenue jumped 81 percent to $8,7 billion in the nine months to March 31, 2022, compared to the same prior year period, driven by solid demand for the wines and spirits maker’s products.
The revenue increase during the period under review, the company said, was driven by strong volume growth in the wines and ready to drink segments of the company’s operations.
However, the Zimbabwe Stock Exchange listed firm said the Covid-19 pandemic induced restrictions had a knock on effect on the business after it negatively impacted supply chains.
This, according to the group, constrained glass supplies from neighbouring South Africa, which negatively impacted product supply for the ready to drink segment.
The Hunters’ brand was the worst affected. Afdis highlighted the group was making efforts to widen its glass supply base to minimise product shortages.
“Covid-19 restrictions impacted negatively on glass supply from South Africa thereby affecting our ability to meet demand on some brands in the final quarter,” said chairman Matts Valela in an update for the period to March 31, 2022.
The business environment during the review period was generally stable, but foreign currency shortages remained a challenge.
Towards the end of the year, the economy experienced significant foreign exchange rate volatility which posed a negative impact on businesses across sectors.
“Resultantly, value chain costs increased necessitating frequent price reviews,” said Mr Valela.
During the year under review, revenue rose 81 percent to $8,7 billion compared to $4,8 billion recorded in the nine months to March 31, 2021, spurred by solid demand which drove volumes.
Volumes increased by 36 percent during the period under review, benefitting from steller demand in the wines and ready to drink (RTDs) segments which rose 65 percent and 50 percent, respectively.
Afdis, however, is benefiting from the foreign currency sales, which are boosting liquidity for the company making it easier to fund external supplies of raw materials and capital equipment.
Afdis said: “The ability of the business to continue trading in foreign currency helped in sustaining the company’s import requirement.”
While the business environment is expected to remain challenging, Afdis indicated various mitigatory measures had been put in place to keep the business sustainable.
Management says it will maintain its focus on revenue and profitability growth opportunities through product innovation, market share protection, production efficiencies and cost containment.
The group is also working on capital projects to localise some imported products.