Improved foreign currency supply positively impacts on AfDis operations

Author Name
Respect Gwenzi
Author
Stock Market 11 months ago
  • Quarterly volumes up 28%
  • Revenue up 15%
  • Operations smoothened by improved accessibly to forex facilitated by the Forex Auction

Harare – Liquor manufacturer and distributor African Distillers Limited has posted improved volumes in spirits and ready-to-drink (RTD) operations, as well as a jump in revenue for the third quarter, ended 30 September 2020 on the back of improved foreign currency supply.

According to a trading update on the company’s operations for the period under review, AfDis registered an average volume growth of 28% compared to the same period last year.

Spirits and Ready-To-Drink (RTD) volumes grew by 43% and 24% respectively while wines declined by 38% over the comparative period.

The revenue for the first quarter came in at ZWL456million representing 15% in inflation-adjusted terms compared to the same period last year.

In a statement accompanying the results, company board chairperson, Mr Mutamuko revealed that “In addition to the growth in volume, a favourable sales mix which favoured higher valued sprits largely contributed to the good revenue performance.”

All this, the company says is founded on the increased accessibility to foreign currency that has come partly as a result of the foreign currency auction introduced by the central bank in June 2020 and the increased ability by the customers to settle bills in foreign currency.

“The ability of customers to settle in foreign currency and the foreign currency auction system has brought the well-needed relief to the industry and the economy at large. The Company was able to meet all its demand and satisfy the market requirements owing to the improved foreign currency supply,” said the chairperson.

The chairperson, however, lamented the effects of COVID 19 on business as it weighed down on the performance despite it being positive.

“COVID-19 pandemic negatively impacted the economy in the quarter under review as restrictions and prohibitions on travel and social gatherings affected overall demand.”

Going forward, the company is banking on the consistency of monetary and fiscal measures put in place by the government to continue the positive impact on the business while they report that their management will simultaneously “focus on the protection of market share, innovation and cost management to enhance shareholder value.”

AfDis manufactures popular liquor brands that include Viceroy, GoldBlend, Chateau, 4th Street and Green Valley.

Equity Axis News.


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