SABMiller Zimbabwe Unit Profit Drops as Sales of Lager Decline

Delta Corp., the Zimbabwean brewer that’s the country’s biggest company by market value, said first-half profit fell 6 percent as cash-strapped drinkers switched to more affordable sorghum beer amid an economic slump.

Net income was $45 million in the six months through September, Chief Executive Officer Pearson Gowero told an analyst briefing today in the capital, Harare. That compared with $47.7 million in the same period last year. Delta is about 23 percent owned by SABMiller Plc, the London-based maker of Peroni, Grolsch and Castle lagers.

“There is no doubt that the economy is experiencing tough times,” Gowero said. “Consumers are switching to affordable sorghum beer.”

Zimbabwe economic growth is expected to slow this year as consumer spending plummets and investment languishes, partially because of a law that compels 51 percent ownership of companies by black nationals. Sorghum is a type of plant grown in Africa and used for food and biofuels as well as beer.

Delta lager volumes were down 25 percent in the half year, while sales of sorghum beer grew 14 percent, Gowero said. Revenue fell by 4 percent to $302 million, while the interim dividend was set at $1.35 per share.

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