Key events for the six months ended 30 September included the introduction of the Zimbabwe Gold currency in April 2024. Reduced output from the El-Nino drought as well as lower mineral prices impacted aggregate consumer demand. Despite this, consumer spending remained resilient anchored by government infrastructure projects as well as diaspora remittances. South Africa held general elections in May. Electricity supply has notably improved in the country, whilst the rand has appreciated from c. ZAR19/US$ to ZAR17.5/US$. Water challenges however have emerged in key urban centres. Zambia continued to experience challenges from the drought, low copper prices as well as currency volatility. Lager volumes for Delta grew 9% on firmer demand as well as the consistent supply of brands and packs. Sorghum beer volumes in the Zimbabwean market weakened 11% due to the cessation of exports. Domestic volumes fell 3% owing to more elastic incomes associated with the segment as well as competition from illicit brews. In South Africa, sorghum beer volumes at United National Breweries declined 8% from prolonged job action whilst in Zambia, volumes were 20% down, with production declining significantly in the second quarter due to load shedding. In the local sparkling beverages segment, volumes grew 10% marking a clawback of some market share. Afdis volumes grew 11% spurred on by the Ready to drink and Wine segments whilst Schweppes volumes softened 9% owing to significant price increases from the sugar tax. Nampak volumes remained flat y/y despite a challenging tobacco season. For the 6 months, Delta’s topline grew 3% to US$389.12mn, adjusted for the currency conversion process. The currency split of sales shifted from an average 88% in USD to 77% with the introduction of the new currency. Operating costs for the Group were higher in the period owing to absorption of the sugar tax as well as higher cost of imported maize inputs. As a result, EBITDA retreated 5.4% to US$74.41mn with the EBITDA margin reducing from 22.4% to 19.1%. Net exchange losses in the period declined 67.9% from US$32.81mn to US$10.54mn. As a result, PAT for the 6 months grew 85% to US$41.05mn. The board resolved to declare an interim dividend of USc1 with shares trading cum dividend until the 26th of November.
