Delta Corporation Limited has urged the government and regulators to engage stakeholders ahead of major policy pronouncements in order to maintain market confidence in its trading update for the second quarter and half year to 30 September 2018.
The corporation urges the government as the country goes through panic buying after the Minister of Finance announced some changes in Zimbabwe’s tax from 5 cents a transaction to a 2 cents on every dollar transacted.
“Post the end of the reporting period, the fiscal and monetary policy pronouncements have been dampened by the currency policy statements which seem to contradict the previous undertakings by the Reserve Bank of Zimbabwe on the multicurrency framework,” Delta says in a press release.
“In addition the 2% transaction tax took both business and consumers by surprise, raising policy risks and undermining market confidence.”
Delta Corporations also says the group’s revenue increased by 33% (30% organic growth) for the quarter and 37% for the half year driven by the volume growth in the beer businesses.
The Lager beer volume grew by 52% over prior year for the quarter and is up 54% for the six months.
“The Sorghum beer volume in Zimbabwe grew by 9% above prior year for the quarter and 2% for the six months,” the company says.
“National Breweries Plc – Zambia (Natbrew Plc) recorded a volume growth of 13%, in response to the volume recovery initiatives which focus on packs and competitive pricing,” Delta goes on.
Although there has been growth in revenue, Delta’s spackling beverages volume declined by 14% compared to the prior year for the quarter and grew by 3% for the six months.
“The category (Spakling beverages) was adversely affected by the challenges in securing imported raw materials, leading to extended periods of production stoppages and out of stock situations,” Delta says.
“The production capacity for Chibuku Super is now fully extended whilst that for standard Chibuku is limited by the shortages of Scud bottles.”
Lager beer is meeting some frictional shortages of brands and packs occasioned by the limited production capacity and raw material supply issues.
Delta Corporations also says it has maintained stable retail prices since 2013 in its latest trading update.
“The business performance reflects the relative impact of the import content requiring hard currency in each business segment,” the company says. “Consumer demand has been firm due to increased economic activity in mining and agriculture, expansionary fiscal and monetary policies and the election-related spending”