The local economy saw modest growth in the reporting period, which was driven by both formal and informal mining, government infrastructure projects and diaspora remittances. there was lower than expected maize output, other agricultural products such as wheat recorded growth, contributing towards the economic growth. The economy was, however, negatively impacted by high inflation, the depreciation of the local currency and increased power supply outages during the second half of the year. Consumer spending continued to be buoyant, being boosted by stable USD pricing, and modest improvements in wages and salaries across various sectors. The period saw increased informalisation of trade due to a number of issues such as the distorted pricing arising from use of multiple exchange rates, high IMTT tax, mandatory liquidations of foreign currency deposits and high bank charges. Looking at trading performance, lager volumes grew 17% y/y to 2.2mn hectolitres benefitting from the injection of returnable glass bottles and the improved plant performance. Operations however continued to be hamstrung by production capacity and supply constraints in packing resulting in a mismatch between demand and supply. Local sorghum beer volumes registered 9% y/y growth despite power and water supply constraints. In the South African entity, United National Breweries, grew 12% in the year as a result of slower volumes in the second half. In the Zambian market, a positive development was that of volumes turning the corner into positive territory growing 28% y/y to FY23. Sparkling beverages volumes grew by 10% y/y whilst Afdis volumes recorded an 18% y/y increase to FY23. Delta’s revenue outturn for FY23 as per management’s comments was circa US$713mn with an EBIT of US$140.6mn. Whilst there has been a notable improvement in volumes for regional segments, both NatBrew and United Breweries remained in a loss position for the year. The group continued to exhibit strong cash generation abilities, with OCF/EBITDA improving from 48% in FY22 to 57% in the period under review. The Board declared a dividend of USc3 per share translating to a dividend yield of 5.3%.
