By Alois Vinga
LISTED alcoholic beverages producer, African Distillers (Afdis) says it seized the prevailing multi-currency trading regime opportunity to generate adequate US$ and working capital which has gone a long way in supporting the group’s activities.
Despite the ZWL being the legal tender, the government has since issued regulations to allow a dual currency system which has seen the US$ floating alongside the local currency.
The move has gone a long way to augment existing government supported foreign currency streams to companies through internal sales, in turn being deployed to fund critical productivity needs.
Presenting a trading update for the quarter ended June 30 2023, Afdis company secretary, Lydia Mutamuko hailed the policy directives for spurring the company’s viability.
“Trading in a multi-currency environment enabled the Company to meet its foreign currency working capital requirements.
“In response to inflation pressures during the period, the government introduced measures to stabilise the economy which included liberalisation of the foreign currency exchange market and directing taxpayers to pay taxes in local currency.
“The measures resulted in tightened liquidity and recovery of the Zimbabwean dollar towards the tail end of the quarter,” she said.
During the period, the company registered a volume growth of 11% above the prior year mainly driven by the Ready-to-Drink (“RTD”) segment which grew by 26%, owing to improved product availability.
Spirits volume grew by 1% while wine category volume declined by 13% due to competition from cheaper imported brands and reduced consumer traffic in key account retail chain stores which impacted negatively demand.
The group’s revenue for the quarter grew by 143% in inflation-adjusted terms over last year, whilst in historic cost terms grew by 808%.
In the foreign currency segment, turnover grew by 15% to US$12,5 million on the back of increased volume and inflation related price adjustments.
“The economic environment still presents opportunities for business growth despite uncertainties around exchange rates and utilities availability. Management continues to put measures in place to exploit the available opportunities to sustain market share, revenue, and profitability growth.
“Focus will also be on product innovation, production efficiencies and cost containment measures,” added Mutamuko.
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