Afdis bullish amid tough operating environment
AFRICAN Distillers Limited (Afdis) says it will continue to focus on product innovation, market share growth and production efficiencies amid the challenging operating environment.
The company, which recorded volume growth of 11% in the half-year ended September 30, 2022 compared to prior year, revealed that there were opportunities for growth and these would be anchored on increased economic activity resulting from mining, agriculture infrastructural projects and next year’s harmonised elections, among others.
“The operating environment is set to remain challenging, with uncertainty on power supply and inflation. There are, however, opportunities for growth anchored on increased economic activity resulting from mining, agriculture infrastructural projects, the forthcoming elections and COVID-19 restrictions. The company will continue to focus on product innovation, market share growth, production efficiencies and cost containment measures despite the challenging environment,” Afdis said in its financial statement.
The company bemoaned the tough operating environment characterised by rising inflation, high interest rates and supply chain disruptions.
“The reduction in Zimbabwe dollar liquidity resulted in softening of demand for goods and services in supermarkets, while increasing US dollar transactions in general.” Afdis noted.
During the period, the company’s revenue in inflation adjusted terms increased 48% to $ 14,9 billion while operating income increased 128% to $2 billion.
In historic costs terms, revenue increased 369% to $11,4 billion, while operating income increased 463% to $2,7 billion.
Afdis pointed out that revenue growth in both inflation and historic terms was due to higher volume favourable mix and replacement cost pricing, while operating profit increased due to cost management and improved margins.
Wine volumes grew 24% driven by improved availability and affordability of some brands which are now packaged locally.
Spirit and ready to drink volumes grew 9% and 11%, respectively driven by renewed focus on direct sales distribution.
The Zimbabwe Stock Exchange-listed wine and spirit maker is optimistic of growth next year spurred by projected economic growth and stability.
“It is anticipated that the economy will grow positively in the ensuing year with the promised stable and consistent economic policies; this will also trigger company growth. Accessibility of foreign currency is key to smooth running of the business and the company has been able to access foreign currency requirements from both trading and financial sectors and this is also anticipated to continue in the ensuing year,” Afdis said.
Last month the company re-launched its revamped Gold Blend Black Whisky, and in recent months, it started packaging a number of brands locally that it used to import.
Afdis manufactures and distributes wines, spirits and ciders. It has over six depots across the country. It is a subsidiary of beverage giant, Delta Corporation.-newsday
