- Company reverses declines amid drinker focus on cheaper brands
- Total revenue declines 6% as sparkling drink sales slump 14%
Delta Corp Ltd., the Zimbabwean brewer that’s the southern African nation’s biggest company by market value, said lager volumes returned to growth in the second quarter as price cuts and a shift by drinkers to cheaper brands boosted consumption.
Volumes of the alcoholic beverage gained 5 percent in the three months through September, compared with a 29 percent fall in the same period a year earlier, the unit of London-based SABMiller Plc said in an e-mailed statement on Tuesday. Total revenue fell 6 percent in the period, as lower prices and a 14 percent slump in sales of sparkling drinks weighed.
“Price adjustments were implemented to stimulate volume, with particular focus on core lager which remains in decline,” the Harare-based company said. “The trading environment remains challenging.”
Delta lowered the price of a pint of lager to 80 cents from 90 cents this month, the second price cut this year. Zimbabwean consumer spending as been weak amid the country’s worst economic crisis since 2008, as businesses battle tight liquidity and deflation, while the government struggles to pay civil-service wages on time.
Delta shares were unchanged at 81.5 cents at 3:58 p.m. in Harare, having declined 20 percent this year. That values the company at about $1 billion.
— With assistance by Brian Latham