Brighter together
Preliminary Unaudited
Financial Information
for the year ended 31 March 2023
Salient Features
INFLATION ADJUSTED | HISTORIC COST | |
Increased by 60% | Increased by 423% | |
Revenue | to ZW$ 536,92 billion | to ZW$ 452,08 billion |
Increased by 29% | Increased by 375% | |
Operating Income | to ZW$ 99,79 billion | to ZW$ 102,70 billion |
Earnings Before Interest, Tax, Depreciation | Increased by 29% | Increased by 381% |
and Amortisation (EBITDA) | to ZW$ 112,60 billion | to ZW$ 106,72 billion |
Increased by 27% | Increased by 382% | |
Headline Earnings per share | to ZW$ 4 839,29 cents | to ZW$ 7 400,91 cents |
Increased by 29% | Increased by 388% | |
Attributable Earnings per share | to ZW$ 4 842,23 cents | to ZW$ 7 400,79 cents |
Dividend per share | Interim dividend declared | Total dividend declared |
US$ 0,01 cent | US$ 0,03 cent | |
Final dividend declared | ||
US$ 0,02 cent | ||
Group Statement of Financial Position
INFLATION ADJUSTED | *HISTORIC COST | |||||
Unaudited | Audited | |||||
As At | As At | As At | As At | |||
31 March | 31 March | 31 March | 31 March | |||
2023 | 2022 | 2023 | 2022 | |||
ZW$ 000 | ZW$ 000 | ZW$ 000 | ZW$ 000 | |||
ASSETS | ||||||
Non-current assets | ||||||
Property, plant and equipment | 173 923 271 | 132 712 292 | 79 360 766 | 14 835 768 | ||
Right-of-use asset | 525 591 | 326 013 | 73 448 | 31 912 | ||
Investments in associates | 14 157 530 | 13 705 362 | 5 087 372 | 1 339 858 | ||
Intangible assets | 28 146 509 | 23 339 480 | 21 075 114 | 5 158 629 | ||
Investments and loans | 7 426 173 | 3 826 151 | 7 426 173 | 1 257 568 | ||
Financial assets at armotised cost | 1 435 442 | - | 1 435 442 | - | ||
225 614 516 | 173 909 298 | 114 458 315 | 22 623 735 | |||
Current assets | ||||||
Inventories | 96 351 625 | 45 765 203 | 74 411 957 | 11 309 771 | ||
Trade and other receivables | 40 978 246 | 15 580 593 | 40 978 246 | 5 120 984 | ||
Other assets | 23 766 292 | 30 301 650 | 17 076 633 | 8 596 270 | ||
Current tax asset | - | 417 | - | 137 | ||
Financial Asset at fair value | - | 4 966 364 | - | 1 632 330 | ||
Cash and cash equivalents | 16 011 752 | 15 984 066 | 16 011 752 | 5 253 596 | ||
177 107 919 | 112 598 293 | 148 478 588 | 31 913 088 | |||
Total assets | 402 722 435 | 286 507 591 | 262 936 903 | 54 536 823 | ||
EQUITY AND LIABILITIES | ||||||
Capital and reserves | ||||||
Issued share capital | 1 772 427 | 1 772 314 | 13 081 | 12 986 | ||
Share premium | 12 087 555 | 12 053 579 | 134 811 | 106 462 | ||
Share option reserve | 2 149 581 | 1 486 194 | 729 954 | 135 911 | ||
Share buyback | (2 280 877) | (2 280 877) | (16 418) | (16 418) | ||
Foreign currency translation reserve | 25 089 410 | 7 250 317 | 25 089 410 | 2 045 545 | ||
Retained earnings | 203 607 277 | 149 349 951 | 108 540 711 | 21 190 122 | ||
Other reserves - Arising from change in ownership | (1 185 112) | (974 549) | (427 172) | (211 004) | ||
Equity attributed to equity holders of the parent | 241 240 261 | 168 656 929 | 134 064 377 | 23 263 604 | ||
Non-controlling interests | (1 693 863) | 2 667 337 | (4 958 521) | (160 863) | ||
Shareholders' equity | 239 506 398 | 171 324 266 | 129 105 856 | 23 102 741 | ||
Non-current liabilities | ||||||
Long term borrowings | 467 767 | 5 468 957 | 467 767 | 1 797 521 | ||
Long term lease liability | 1 818 920 | 497 437 | 1 818 920 | 163 496 | ||
Deferred tax liabilities | 31 169 372 | 27 209 367 | 1 824 382 | 2 519 059 | ||
33 456 059 | 33 175 761 | 4 111 069 | 4 480 076 | |||
Current liabilities | ||||||
Short term borrowings | 5 162 598 | 4 977 011 | 5 162 598 | 1 635 830 | ||
Short term lease liability | 208 853 | 39 410 | 208 853 | 12 953 | ||
Trade and other payables | 91 409 769 | 45 327 181 | 91 409 769 | 14 898 005 | ||
Provisions | 28 059 215 | 15 012 590 | 28 059 215 | 4 934 294 | ||
Dividend payable | 2 | 11 853 337 | 2 | 3 895 920 | ||
Current tax liability | 4 879 541 | 4 798 035 | 4 879 541 | 1 577 004 | ||
129 719 978 | 82 007 564 | 129 719 978 | 26 954 006 | |||
Total equity and liabilities | 402 722 435 | 286 507 591 | 262 936 903 | 54 536 823 | ||
Net asset value per share (cents) | 18,499.96 | 13,018.00 | 10,280.97 | 1,795.62 | ||
* The Historical information is provided as supplementary information. Refer to note 9.
Group Statement of Profit or Loss and
Other Comprehensive Income
INFLATION ADJUSTED | *HISTORIC COST | |||||
Unaudited | Audited | |||||
Year Ended | Year Ended | Year Ended | Year Ended | |||
31 March | 31 March | 31 March | 31 March | |||
2023 | 2022 | 2023 | 2022 | |||
ZW$ 000 | ZW$ 000 | ZW$ 000 | ZW$ 000 | |||
Revenue | 536 922 601 | 335 163 349 | 452 081 417 | 86 457 003 | ||
Operating income | 99 794 818 | 77 202 932 | 102 701 498 | 21 601 298 | ||
Finance charges | (6 876 242) | (1 326 752) | (6 216 127) | (409 256) | ||
Finance income | 59 112 | 422 302 | 32 603 | 84 964 | ||
Exchange gain / (losses) | 29 966 508 | 7 071 333 | 14 636 097 | 2 865 505 | ||
Movement in legacy debt | (1 227 057) | (1 539 767) | (1 227 057) | (506 086) | ||
Monetary loss | (34 840 255) | (23 246 276) | - | - | ||
Share of profit of associates | 452 172 | 1 765 042 | 3 747 514 | 717 964 | ||
Profit before tax | 87 329 056 | 60 348 814 | 113 674 528 | 24 354 389 | ||
Income tax expense | (24 186 210) | (11 666 485) | (17 167 891) | (4 721 451) | ||
Profit for the year | 63 142 846 | 48 682 329 | 96 506 637 | 19 632 938 | ||
Attributable to: | ||||||
Owners of the parent | 65 392 176 | 48 581 359 | 97 132 858 | 19 340 403 | ||
Non controlling interest | (2 249 330) | 100 970 | (626 221) | 292 535 | ||
Total profit for the year | 63 142 846 | 48 682 329 | 96 506 637 | 19 632 938 | ||
Other comprehensive income | ||||||
Foreign exchange differences on | ||||||
translation of foreign operations | 15 975 437 | (394 859) | 19 070 714 | 733 508 | ||
Total Comprehensive income for the year | 79 118 283 | 48 287 470 | 115 577 351 | 20 366 446 | ||
Total comprehensive income | ||||||
for the year attributable to: | ||||||
Owners of the parent | 83 231 269 | 49 747 391 | 120 176 723 | 20 586 940 | ||
Non controlling interest | (4 112 986) | (1 459 921) | (4 599 372) | (220 494) | ||
79 118 283 | 48 287 470 | 115 577 351 | 20 366 446 | |||
Weighted average shares in issue (millions) | 1,304 | 1,296 | 1,304 | 1,296 | ||
Earnings per share (ZW$ cents) | ||||||
Headline earnings | 4,839.29 | 3,818.59 | 7,400.79 | 1,536.39 | ||
Diluted earnings | 4,777.89 | 3,710.84 | 7,302.46 | 1,496.53 | ||
Basic earnings | 4,842.23 | 3,757.59 | 7,400.79 | 1,515.39 | ||
* The Historical information is provided as supplementary information. Refer to note 9.
We Are Delta Corporation - Brighter Together | 1 |
Preliminary Unaudited Financial Information
for the year ended 31 March 2023
Condensed Statement of Cash Flows
INFLATION ADJUSTED | *HISTORIC COST | |||
Unaudited | Audited | |||
As At | As At | As At | As At | |
31 March | 31 March | 31 March | 31 March | |
2023 | 2022 | 2023 | 2022 | |
ZW$ 000 | ZW$ 000 | ZW$ 000 | ZW$ 000 | |
Cash flow from operating activities | ||||
Cash generated from operating activities | 128 445 022 | 62 015 749 | 109 571 035 | 19 587 141 |
Increase in working capital | (41 481 316) | (15 123 543) | (16 351 239) | (5 727 072) |
Cash generated from operations | 86 963 706 | 46 892 206 | 93 219 796 | 13 860 069 |
Interest received | 59 112 | 422 302 | 32 603 | 84 964 |
Interest paid | (6 692 468) | (1 326 752) | (6 082 061) | (409 256) |
Interest paid on short term lease liability | (183 774) | (48 881) | (134 066) | (16 066) |
Income tax paid | (21 121 942) | (8 496 537) | (15 612 839) | (2 792 753) |
Capital gains tax paid | (2 085) | - | (1 944) | - |
Net cash flow from operating activities | 59 022 549 | 37 442 338 | 71 421 489 | 10 726 958 |
Cash flow from investment activities | ||||
Increase in investments and loans | (8 737 188) | (1 255 810) | (5 665 701) | (768 376) |
Dividend received from associate | - | 154 781 | - | 39 861 |
Purchase of property, plant and equipment | ||||
to expand operations | (33 040 907) | (7 490 115) | (30 458 730) | (1 803 281) |
Purchase of property, plant and equipment | ||||
to mantain operations | (12 832 670) | (9 834 601) | (11 829 785) | (2 367 728) |
Proceeds on disposal of property, | ||||
plant and equipment | 73 873 | 42 857 | 53 892 | 14 222 |
Net cash utilised in investing activities | (54 536 892) | (18 382 888) | (47 900 324) | (4 885 302) |
Cash flow from financing activities | ||||
Dividends paid by company | (16 876 667) | (10 424 011) | (13 691 331) | (2 389 494) |
Dividends paid by subsidiaries | (231 312) | (240 823) | (192 396) | (69 585) |
Purchase of shares in subsidiary | (232 123) | (800 339) | (226 544) | (214 957) |
Repayment of short-term lease liability | (574 923) | (466 260) | (419 416) | (153 249) |
Loans raised | 6 010 544 | 517 535 | 4 384 797 | 124 192 |
Repayment of borrowings | (13 025 800) | (8 284 661) | (11 927 672) | (1 988 049) |
Net cash utilised in financing activities | (24 930 281) | (19 698 559) | (22 072 562) | (4 691 142) |
Net decrease in cash and cash equivalents | (20 444 624) | (639 109) | 1 448 603 | 1 150 514 |
Effects of currency translation on cash | ||||
and cash equivalents - foreign operations | 6 176 318 | 7 803 212 | 4 505 732 | 1 872 517 |
Effects of currency translation on opening | ||||
cash and cash equivalents | 4 070 236 | 1 577 545 | 2 969 308 | 378 560 |
Effects of IAS 29 on cash and cash equivalents | 8 563 205 | (2 302 272) | - | - |
(Decrease)/Increase in cash and cash equivalents | (1 634 865) | 6 439 376 | 8 923 643 | 3 401 591 |
Cash and cash equivalents at beginning of year | 15 727 912 | 9 288 536 | 5 169 404 | 1 767 813 |
Cash and cash equivalents at end of year | 14 093 047 | 15 727 912 | 14 093 047 | 5 169 404 |
Comprising:- | ||||
Bank balances and cash | 16 011 752 | 15 984 066 | 16 011 752 | 5 253 596 |
Bank overdraft | (1 918 705) | (256 154) | (1 918 705) | (84 192) |
14 093 047 | 15 727 912 | 14 093 047 | 5 169 404 |
* The Historical information is provided as supplementary information. Refer to note 9.
Group Statement of Changes in Shareholders' Equity
INFLATION ADJUSTED | *HISTORIC COST | |||
Unaudited | Audited | |||
Year Ended | Year Ended | Year Ended | Year Ended | |
31 March | 31 March | 31 March | 31 March | |
2023 | 2022 | 2023 | 2022 | |
ZW$ 000 | ZW$ 000 | ZW$ 000 | ZW$ 000 | |
Shareholders' equity at beginning of the year | 171 324 266 | 139 183 175 | 23 102 741 | 7 722 457 |
Profit for the period | 63 142 846 | 48 682 329 | 96 506 637 | 19 632 938 |
Other comprehensive income for the period | 15 975 437 | (394 859) | 19 070 714 | 733 508 |
Transactions with Owners: | ||||
Share options exercised | 4 660 | 14 698 | 4 488 | 4 835 |
Recognition of share based payments | 735 484 | 551 727 | 635 629 | 134 098 |
Adjustment arisisng from changes in | ||||
ownership of subsidiary | (232 123) | (478 271) | (226 544) | (214 957) |
Dividends declared: | (11 404 172) | (16 234 533) | (9 987 809) | (4 910 138) |
Shareholders' equity at end of the period | 239 546 398 | 171 324 266 | 129 105 856 | 23 102 741 |
Attributable to: | ||||
Owners of the parent | 241 240 261 | 168 656 929 | 134 064 377 | 23 263 604 |
Non controlling interest | (1 693 863) | 2 667 337 | (4 958 521) | (160 863) |
Shareholders' equity at end of the period | 239 546 398 | 171 324 266 | 129 105 856 | 23 102 741 |
* The Historical information is provided as supplementary information. Refer to note 9.
Supplementary Information
INFLATION ADJUSTED | *HISTORIC COST | ||||
Unaudited | Audited | ||||
Year Ended | Year Ended | Year Ended | Year Ended | ||
31 March | 31 March | 31 March | 31 March | ||
2023 | 2022 | 2023 | 2022 | ||
ZW$ 000 | ZW$ 000 | ZW$ 000 | ZW$ 000 | ||
1. Revenue | |||||
Gross sales | 623 340 567 | 381 590 794 | 526 054 286 | 98 348 129 | |
Less VAT and discounts | (86 417 966) | (46 427 445) | (73 972 869) | (11 891 126) | |
Revenue | 536 922 601 | 335 163 349 | 452 081 417 | 86 457 003 | |
Less excise duty and levies | (66 718 160) | (35 890 417) | (56 417 890) | (8 996 585) | |
Net Sales | 470 204 441 | 299 272 932 | 395 663 527 | 77 460 418 |
2. Depreciation of property, plant and equipment, amortisation and impairment
of intangible assets | 12 805 232 | 10 373 592 | 4 018 546 | 564 515 | |
3. Taxation | |||||
Current income tax expense | 18 915 376 | 11 885 666 | 18 915 376 | 3 906 546 | |
Withholding tax | - | 119 | - | 39 | |
Deferred tax - Arising during the year | 5 268 749 | (219 300) | (1 749 429) | 814 866 | |
Capital gains tax | 2 085 | - | 1 944 | - | |
24 186 210 | 11 666 485 | 17 167 891 | 4 721 451 |
Supplementary Information (continued)
INFLATION ADJUSTED | *HISTORIC COST | ||||
Unaudited | Audited | ||||
Year Ended | Year Ended | Year Ended | Year Ended | ||
31 March | 31 March | 31 March | 31 March | ||
2023 | 2022 | 2023 | 2022 | ||
ZW$ 000 | ZW$ 000 | ZW$ 000 | ZW$ 000 | ||
4. Commitments for property, plant and equipment | |||||
Authorised by directors but not contracted | 92 596 000 | 38 825 343 | 92 596 000 | 12 761 000 | |
92 596 000 | 38 825 343 | 92 596 000 | 12 761 000 |
The capital expenditure is to be financed out of the Group's own resources and existing facilities.
5. Segmental Reporting
The distinct operating segments for the Group are shown in the table below:
Reportable segments | Operations |
Lager Beer division | Manufacture and distribution of lager beer (malt and sorghum based clear beers). |
Sparkling Beverages division | Manufacture and distribution of carbonated soft drinks and alternative non-alcoholic |
beverages | |
Sorghum Beer division | Manufacture and distribution of sorghum based opaque beer. |
Wines and Spirits | Manufacture and distribution of wines and spirits. |
Other operations include barley, sorghum malting and provision of transport services which are functional departments for the above mentioned divisions.
None of these segments met the quantitative thresholds for reportable segments in 2023 nor 2022.
Information about reportable segments
Information related to each reportable segment is set out below. Segment operating income is used to measure performance because management believes that this information is the most relevant in evaluating the results of the respective segments relative to other entities that operate in the same industries.
There are varying levels of integration between the Lagers, Sparkling Beverages, and Sorghum segments. This integration includes shared primary and secondary distribution services and facilities. The Group has a centralised treasury function.
Total | |||||||
Lager | Sparkling | Sorghum | Wines | Reportable | All Other | ||
Beer | Beverages | Beer | and Spirits | Segments | Segments | Total | |
ZW$ 000 | ZW$ 000 | ZW$ 000 | ZW$ 000 | ZW$ 000 | ZW$ 000 | ZW$ 000 | |
INFLATION ADJUSTED | |||||||
2023 | |||||||
Segment revenue | 222 852 031 | 92 223 907 | 179 745 869 | 41 005 939 | 535 827 746 | 17 930 764 | 553 758 510 |
Inter-segment revenue | - | - | - | - | - | (16 835 909) | (16 835 909) |
External revenue | 222 852 031 | 92 223 907 | 179 745 869 | 41 005 939 | 535 827 746 | 1 094 855 | 536 922 601 |
Segment operating | |||||||
income | 56 767 620 | 9 933 233 | 18 865 258 | 5 398 896 | 90 965 007 | 8 829 811 | 99 794 818 |
Segment finance costs | - | - | (111 285) | (609 091) | (720 376) | (6 155 866) | (6 876 242) |
Segment net | |||||||
working capital* | (62 878) | 9 583 982 | 13 194 141 | 8 263 271 | 30 978 516 | 21 288 968 | 52 267 484 |
Segment trade | |||||||
and other payables | (30 038 491) | (24 198 935) (36 683 159) | (10 659 718) | (101 580 303) | (23 260 132) | (124 840 435) | |
Segment working | |||||||
capital assets | 29 975 613 | 33 782 917 | 49 877 300 | 18 922 989 | 132 558 819 | 44 549 100 | 177 107 919 |
Segment property, | |||||||
plant and equipment | 41 017 215 | 60 428 497 | 53 803 398 | 4 866 904 | 160 116 014 | 13 807 257 | 173 923 271 |
Non-current | |||||||
assets additions | 19 744 863 | 8 580 288 | 11 523 170 | 1 452 178 | 41 300 499 | 4 573 078 | 45 873 577 |
Total | |||||||
Lager | Sparkling | Sorghum | Wines | Reportable | All Other | ||
Beer | Beverages | Beer | and Spirits | Segments | Segments | Total | |
ZW$ 000 | ZW$ 000 | ZW$ 000 | ZW$ 000 | ZW$ 000 | ZW$ 000 | ZW$ 000 | |
INFLATION ADJUSTED | |||||||
2022 | |||||||
External revenue | 132 649 921 | 58 304 142 | 115 806 395 | 26 371 562 | 333 132 020 | 10 812 008 | 343 944 028 |
Inter-segment revenue | - | - | - | - | - | (8 780 679) | (8 780 679) |
Segment revenue | 132 649 921 | 58 304 142 | 115 806 395 | 26 371 562 | 333 132 020 | 2 031 329 | 335 163 349 |
Segment operating | |||||||
income | 37 119 951 | 7 355 648 | 19 482 348 | 6 794 167 | 70 752 114 | 6 450 818 | 77 202 932 |
Segment net | |||||||
working capital* | 8 473 682 | 1 544 875 | 1 333 987 | 6 527 434 | 17 879 978 | 24 395 342 | 42 275 320 |
Segment trade | |||||||
and other payables | (12 460 373) | (13 402 133) (25 529 566) | (3 098 844) | (54 490 916) | (10 865 276) | (65 356 192) | |
Segment working | |||||||
capital assets | 20 934 055 | 14 947 008 | 26 863 553 | 9 626 278 | 72 370 894 | 35 260 618 | 107 631 512 |
Segment property, | |||||||
plant and equipment | 29 675 130 | 45 047 453 | 41 638 073 | 3 729 527 | 120 090 183 | 12 622 109 | 132 712 292 |
Non-current | |||||||
assets additions | 5 323 064 | 5 493 374 | 3 570 447 | 743 003 | 15 129 888 | 2 194 828 | 17 324 716 |
Total | |||||||
Lager | Sparkling | Sorghum | Wines | Reportable | All Other | ||
Beer | Beverages | Beer | and Spirits | Segments | Segments | Total | |
ZW$ 000 | ZW$ 000 | ZW$ 000 | ZW$ 000 | ZW$ 000 | ZW$ 000 | ZW$ 000 | |
HISTORIC COST | |||||||
2023 | |||||||
Segment revenue | 186 007 528 | 77 183 946 | 153 873 333 | 34 194 079 | 451 258 886 | 15 107 938 | 466 366 824 |
Inter-segment revenue | - | - | - | - | - | (14 285 407) | (14 285 407) |
External revenue | 186 007 528 | 77 183 946 | 153 873 333 | 34 194 079 | 451 258 886 | 822 531 | 452 081 417 |
Segment operating | |||||||
income | 49 811 955 | 13 491 285 | 18 092 586 | 7 452 530 | 88 848 356 | 13 853 142 | 102 701 498 |
Segment finance costs | - | - | (111 285) | (550 730) | (662 015) | (5 554 112) | (6 216 127) |
Segment net | |||||||
working capital | (7 217 745) | 7 146 294 | 1 280 650 | 6 554 269 | 7 763 468 | 15 874 685 | 23 638 153 |
Segment working | |||||||
capital liabilities* | (30 038 491) | (24 198 935) (36 683 159) | (10 659 718) | (101 580 303) | (23 260 132) | (124 840 435) | |
Segment working | |||||||
capital assets** | 22 820 746 | 31 345 229 | 37 963 809 | 17 213 987 | 109 343 771 | 39 134 817 | 148 478 588 |
Segment property, | |||||||
plant and equipment | 20 705 727 | 21 416 793 | 31 264 242 | 1 161 224 | 74 547 986 | 4 812 780 | 79 360 766 |
Non-current | |||||||
assets additions | 17 345 931 | 8 288 469 | 11 241 854 | 995 100 | 37 871 354 | 4 417 161 | 42 288 515 |
We Are Delta Corporation - Brighter Together | 2 |
Preliminary Unaudited Financial Information
for the year ended 31 March 2023
Supplementary Information (continued)
5. Segmental Reporting (continued)
Information about reportable segments (continued)
Total | |||||||
Lager | Sparkling | Sorghum | Wines | Reportable | All Other | ||
Beer | Beverages | Beer | and Spirits | Segments | Segments | Total | |
ZW$ 000 | ZW$ 000 | ZW$ 000 | ZW$ 000 | ZW$ 000 | ZW$ 000 | ZW$ 000 | |
HISTORIC COST | |||||||
2022 | |||||||
Segment revenue | 33 568 298 | 14 973 622 | 30 833 617 | 6 562 432 | 85 937 969 | 2 732 674 | 88 670 643 |
Inter-segment revenue | - | - | - | - | - | (2 213 640) | (2 213 640) |
Segment revenue | 33 568 298 | 14 973 622 | 30 833 617 | 6 562 432 | 85 937 969 | 519 034 | 86 457 003 |
Segment operating | |||||||
income | 10 822 788 | 2 403 768 | 5 097 673 | 1 766 324 | 20 090 553 | 1 510 745 | 21 601 298 |
Segment net | |||||||
working capital* | 427 782 | 89 283 | 53 253 | 1 648 759 | 2 219 077 | 6 580 461 | 8 799 538 |
Segment trade | |||||||
and other payables** | (4 095 439) | (4 404 974) | (8 390 983) | (1 018 519) | (17 909 915) | (3 571 167) | (21 481 082) |
Segment working | |||||||
capital assets | 4 523 221 | 4 494 257 | 8 444 236 | 2 667 278 | 20 128 992 | 10 151 628 | 30 280 620 |
Segment property, | |||||||
plant and equipment | 3 376 269 | 4 746 744 | 5 784 151 | 248 642 | 14 155 806 | 679 962 | 14 835 768 |
Non-current | |||||||
assets additions | 1 340 434 | 999 808 | 1 169 143 | 201 884 | 3 711 269 | 459 740 | 4 171 009 |
- Included are trade and other payables, provisions and short term borrowings.
- Net working capital comprises of cash and cash equivalents, receivables, inventories, payables excluding provision for tax.
The accounting policies of the reportable segments are the same as the Group's accounting policies. Segment operating income represents segment income before the allocation of central administration costs. This is the measure reported to the chief operating decision maker for the purposes of resource allocation and assessment of segment performance.
No single customer contributed 10% or more to the Group's or individual segment's revenue.
INFLATION ADJUSTED | HISTORIC COST | |||||
2023 | 2022 | 2023 | 2022 | |||
ZW$ 000 | ZW$ 000 | ZW$ 000 | ZW$ 000 | |||
i) | Revenue | |||||
Total revenue for reportable segments | 535 827 746 | 333 132 020 | 451 258 886 | 85 937 969 | ||
Revenue for other segments | 17 930 764 | 10 812 008 | 15 107 938 | 2 732 674 | ||
Elimination of inter-segment revenue | (16 835 909) | (8 780 679) | (14 285 407) | (2 213 640) | ||
Consolidated revenue | 536 922 601 | 335 163 349 | 452 081 417 | 86 457 003 | ||
ii) | Operating income | |||||
Total operating income for reportable segments | 90 965 007 | 70 752 114 | 88 848 356 | 20 090 553 | ||
Operating income for other segments | 8 829 811 | 6 450 818 | 13 853 142 | 1 510 745 | ||
- Finance income | 59 112 | 422 302 | 32 603 | 84 964 | ||
- Finance cost | (6 876 242) | (1 326 752) | (6 216 127) | (409 256) | ||
- Share of profit of equity-accounted investees | 308 681 | 1 765 042 | 3 747 514 | 717 964 | ||
- Exchange gains / (losses) | 29 966 508 | 7 071 333 | 14 636 097 | 2 865 505 | ||
- Movement in legacy debt | (1 227 057) | (1 539 767) | (1 227 057) | (506 086) | ||
- Monetary loss | (37 935 530) | (23 246 276) | - | - | ||
Consolidated profit before tax | 84 090 290 | 60 348 814 | 113 674 528 | 24 354 389 | ||
iii) Assets | ||||||
Total working capital assets for | ||||||
reportable segments | 59 890 842 | 72 370 895 | 109 343 771 | 20 128 992 | ||
Working capital assets for other segments | 118 652 515 | 35 260 621 | 40 570 259 | 10 151 629 | ||
Total property, plant and equipment | ||||||
for reportable segments | 160 116 014 | 120 090 183 | 74 547 986 | 14 155 806 | ||
Property, plant and equipment | ||||||
for other segments | 13 807 257 | 12 622 109 | 4 812 780 | 679 962 | ||
Intangible assets | 28 146 509 | 23 339 477 | 21 075 114 | 5 158 629 | ||
Right-of-use asset | 525 591 | 326 013 | 73 448 | 31 912 | ||
Equity-accounted investees | 14 014 039 | 13 705 361 | 5 087 372 | 1 339 858 | ||
Investments and loans | 7 426 173 | 3 826 151 | 7 426 173 | 1 257 568 | ||
Current tax asset | - | 417 | - | 137 | ||
Financial Asset at fair value | - | 4 966 364 | - | 1 632 330 | ||
Consolidated total assets | 402 578 940 | 286 507 591 | 262 936 903 | 54 536 823 | ||
iii) Liabilities | ||||||
Total trade and other payables | ||||||
for reportable segments | 101 385 911 | 54 509 670 | 101 385 911 | 17 916 079 | ||
Trade and other payables for other segments | 23 245 671 | 10 807 113 | 23 245 671 | 3 552 050 | ||
Total long-term borrowings | ||||||
for reportable segments | 467 767 | 5 468 958 | 467 767 | 1 797 521 | ||
Long-term borrowings for other segments | - | - | - | - | ||
Total lease liability for reportable segments | 1 104 831 | 478 683 | 1 104 831 | 157 332 | ||
Lease liability for other segments | 922 942 | 58 163 | 922 942 | 19 117 | ||
Total deferred tax liabilities | ||||||
for reportable segments | 2 372 001 | 4 583 739 | 1 355 641 | 1 155 562 | ||
Deferred tax liabilities for other segments | 28 797 371 | 22 625 627 | 468 742 | 1 363 497 | ||
Dividend payable | 2 | 11 853 337 | 2 | 3 895 920 | ||
Current tax liability | 4 879 541 | 4 798 035 | 4 879 541 | 1 577 004 | ||
Consolidated total liabilities | 163 176 037 | 115 183 325 | 133 831 047 | 31 434 082 | ||
- Corporate Information
Delta Corporation Limited (the Company) is a public limited company which is listed on the Zimbabwe Stock Exchange and incorporated and domiciled in Zimbabwe. The principal activities of the Company and its subsidiaries (the Group) include the manufacture and distribution of cold beverages and related value-added activities. - Statement of Compliance
The abridged consolidated financial information of the Group has been compiled adopting principles from International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB), the International Financial Reporting Interpretations Committee (IFRIC) and the Companies and Other Entities Act (Chapter 24:31) and the Zimbabwe Stock Exchange regulations.
- Statement of Compliance (continued)
The Directors note that there are varied interpretations and applications of legislation and exchange control directives governing the current multi-currency framework in Zimbabwe and in particular the statutory instruments relating to the pricing of goods in foreign currency and the exchange rates thereto. These interpretations have a bearing on the application of International Accounting Standard (IAS 21) - The effects of Changes in Foreign Exchange Rates with respect to converting domestic transactions conducted in foreign currencies. - Significant Accounting Policies
The abridged consolidated financial information has been prepared in accordance with the accounting policies adopted in the Group's last annual financial statements and applicable amendments to IFRS. - Basis of Preparation
The abridged consolidated financial information is presented in Zimbabwe dollars. They have been prepared under the inflation-adjusted accounting basis in line with the provisions of International Accounting Standard 29 "Financial Reporting in Hyperinflationary Economies" (IAS 29), hence the historical cost information has been restated for changes in the general purchasing power of the Zimbabwe Dollar and appropriate adjustments and reclassifications have been made. Accordingly, the inflation-adjusted financial statements represent the primary financial statements of the Company and the Group. The historical cost financial statements have been provided by way of supplementary information.
IAS 29 requires that financial statements prepared in the currency of a hyperinflationary economy be stated in terms of a measuring unit current at the balance sheet date and that corresponding figures for previous periods be stated in the same terms as the latest balance sheet date. The restatement has been calculated by means of conversion factors derived from the consumer price index (CPI) prepared by the Zimbabwe Central Statistical Office up to 31 January 2023.
On the 3rd of March 2023, government issued SI 27 of 2023, which defined the term "rate of inflation" and introduced a new inflation rate measurement method. Consequently, ZIMSTATS stopped reporting ZW$ inflation and CPI figures and only released blended CPI figures. This change created a challenge for the Group, as it had been using the ZW$ CPI for reporting inflation adjusted historical figures.
The use of indices issued by Zimstats made comparability possible for business in Zimbabwe. While it is preferable for all companies using the ZW$ functional currency to use the same index, the standard provides that each business may determine an index for the purpose of compliance with IFRS in the absence of official statistics.
In the absence of a reliable, independently determined index, the Group had to consider various methodologies of determining the appropriate indices for the month of February and March. This included the use of independent experts as well as consideration of the movements in the exchange rates which have a bearing on inflation developments. As an additional step, the Group compared the data used in publications issued by recognised institutions. The Group has concluded that indices used for Hyperinflationary accounting are reasonable. The determination of the indices is a significant area of judgement. The timing of the resolution of the uncertainty regarding the CPI is unknown.
The conversion factors used to restate the financial statements are as follows:
Conversion | ||
Index | Factor | |
31 March 2023 | 14 500,9 | 1,00 |
31 March 2022 | 4 766,1 | 3,04 |
31 March 2021 | 2 759,8 | 5,25 |
Average CPI for the 12 months to: | ||
Average March 2023 | 11 618,1 | 1,37 |
Average March 2022 | 3 582,9 | 4,17 |
IAS 29 discourages the publication of historical cost results as the inflation-adjusted results are the primary records. However, the historical cost results are included as supplementary information to allow for comparability. See note 14 for the CPI sensitivity analysis.
10. Currency Changes and Exchange Rates
The financial statements are presented in the ZW$ the transactional, functional and reporting currency.
The Government of Zimbabwe has since 2020 promulgated legislative changes, which have since been consolidated into the Finance Acts, and which permit the use of foreign currencies for domestic transactions. The Monetary Authorities introduced the Foreign Exchange Auction Trading System in June 2020 and the Willing Buyer Willing Seller framework in 2022. The Zimbabwe businesses have relied on foreign currency obtained through the sale of products on the domestic market in line with the multi-currency framework. There have been significant gaps between the auction exchange rates and the rates reflected by comparing the market prices of goods and services quoted in alternative currencies. International Accounting Standard 21 (IAS21) - The effects of Changes in Foreign Exchange Rates require an entity to determine the functional currency based on the economic environment in which it operates. The entity does not believe that the official exchange rates prevailing during the period under review were, at all times, fairly reflective of the currency exchangeability and as such, has used an estimation process, which is allowed by IAS 21. Therefore, the exchange rate applied in translating foreign currency transactions to the reporting currency and as the spot rate used in translating other foreign balances has at times differed from the official rates.
The Institute of Chartered Accountants of Zimbabwe (ICAZ) issued an interpretation guidance titled Lack of Exchangeability - Interpretation of IAS 21, The Effects of Changes in Foreign exchange rates in May 2022. Our interpretation of this guidance confirms that the treatment that the Group has applied in estimating an exchange rate is acceptable.
The Directors have concluded that it is appropriate to report in the ZW$ currency. The Directors would however like to advise users to exercise caution in the use of the abridged consolidated inflation-adjusted financial information in relation to the reporting currency and conversion to comparative currencies.
Application of IAS 21 - The Effects of Changes in Foreign Exchange Rates
The Directors and Management differ with the professional conclusion of our auditors on the application of IAS21. The independent auditors Ernst & Young Chartered Accountants (Zimbabwe) have, since the 2022 reporting period and with respect to the current year issued an adverse audit opinion as they believe that the determination of an estimate exchange rate is not compliant with International Financial Reporting Standards ("IFRS"). The auditors believe the bank rate (either the auction exchange rate or willing buyer willing seller exchange rate) is the appropriate spot exchange rate that is, observable and accessible for immediate delivery through a legal exchange mechanism. This is contrary to the circumstances applicable to the entity as indicated above.
There are varying views on the matter particularly in the absence of definitive guidance from the Public Accountants and Auditors Board.
We Are Delta Corporation - Brighter Together | 3 |
Preliminary Unaudited Financial Information
for the year ended 31 March 2023
Supplementary Information (continued)
11. Legacy Foreign Liabilities
The Group extinguished all legacy foreign liabilities as at 31 March 2023 (2022: US$10,7 million), being those amounts that were due and payable on 22 February 2019 when the authorities promulgated SI33/2019 which introduced the ZW$ currency as distinct from the US$, as the functional currency. The Group had registered these liabilities with the Reserve Bank of Zimbabwe and transferred to the Reserve Bank of Zimbabwe the ZW$ equivalent of the foreign liabilities based on the US$/ZW$ 1:1 exchange rate in line with Directives RU102/2019 and RU28/2019 and as agreed with the Reserve Bank of Zimbabwe. Both the foreign liabilities and the deposits were accounted for at the closing exchange rates and the cash cover deposits at the Reserve Bank of Zimbabwe were disclosed as a financial asset in prior years. The following exchange losses and revaluation gains have been recorded in the statement of profit or loss.
Movement in Legacy Debt
INFLATION ADJUSTED | HISTORIC COST | |||
2023 | 2022 | 2023 | 2022 | |
ZW$ 000 | ZW$ 000 | ZW$ 000 | ZW$ 000 | |
Exchange losses on | ||||
revaluation of legacy debt | (5 169 176) | (4 137 301) | (5 169 176) | (1 359 836) |
Exchange gains on revaluation | ||||
of financial asset | 3 942 119 | 2 597 534 | 3 942 119 | 853 750 |
(1 227 057) | (1 539 767) | (1 227 057) | ( 506 086) | |
An amount of ZW$ 1,2 billion was recorded as an exchange loss relating to the legacy foreign liabilities held during the year. In compliance with IFRS, the deposit at the Reserve Bank of Zimbabwe represented a commitment to pay an equivalent value in US$ and was therefore treated as a financial derivative translated at the closing rate and discounted to Net Present Value.
The legacy debts were transferred from the Reserve Bank of Zimbabwe to the Government of Zimbabwe under the Finance Act No. 7 of 2021. At the end of the year, the Government issued United States Dollar denominated treasury bills in settlement of the legacy debts. As such, the asset presented on the financial statements is the treasury bid component related to legacy debts.
12. | Cash Flow Information | ||||
INFLATION ADJUSTED | HISTORIC COST | ||||
2023 | 2022 | 2023 | 2022 | ||
ZW$ 000 | ZW$ 000 | ZW$ 000 | ZW$ 000 | ||
Cash generated from operating activities | |||||
Profit before tax | 87 329 056 | 60 348 814 | 113 674 528 | 24 354 389 | |
Depreciation of property, plant | |||||
and equipment, right of use and | |||||
container amortisation | 12 805 232 | 11 202 396 | 4 018 546 | 836 924 | |
Impairment of property, | |||||
plant and equipment | - | (828 804) | - | (272 409) | |
Profit on disposal of property, | |||||
plant and equipment | 38 333 | 38 545 | (1 571) | 344 | |
Share option expense | 735 484 | 551 727 | 635 629 | 134 098 | |
Finance charges | 6 876 242 | 1 326 752 | 6 216 127 | 409 256 | |
Finance income | (59 112) | (422 302) | (32 603) | (84 964) | |
Exchange (gain) / losses | (8 997 250) | (7 071 333) | (8 997 250) | (2 865 505) | |
Movement in legacy debt | 1 227 057 | 1 539 767 | 1 227 057 | 506 086 | |
Share of profit of associates | (452 172) | (1 765 042) | (3 747 514) | (717 964) | |
Stock losses and breakages | 3 999 057 | 2 009 979 | 3 537 443 | 593 333 | |
Container and Stock revaluation | (17 489 710) | (2 935 517) | (13 967 391) | (728 344) | |
Monetary loss | 34 840 255 | 23 246 276 | - | - | |
Other non cash items** | 7 592 550 | (25 225 509) | 7 008 034 | (2 578 103) | |
128 445 022 | 62 015 749 | 109 571 035 | 19 587 141 | ||
13. | Contingencies |
13.1 Uncertain Tax Positions
There have been significant currency changes in Zimbabwe since 2018. These changes create some uncertainties in the treatment of transactions for tax purposes due to the absence of clear guidelines and transitional measures. There are further complications arising from the wording of the legislation in relation to the currency of settlement of certain taxes which give rise to interpretations that may differ with those of the tax authorities, thereby creating uncertainties in tax positions.
The Zimbabwe Revenue Authority (ZIMRA) has made some assessments which imply the rejection of the Zimbabwe Dollar as legal tender for the settlement of tax obligations that they deem were payable in foreign currency. These assessments are being objected to and challenged through the courts. Similarly, Natbrew Zambia is challenging an assessment by the Zambia Revenue Authority relating to transfer pricing positions on royalties and group charges for periods prior to the acquisition of the entity. The group anticipates a favourable determination on the tax matters.
14. CPI Sensitivity
The Group considered various methodologies in determining the ZW$ inflation indices to use for preparation of inflation adjusted accounts. The methodologies applied were consistent with those required by International Accounting Standard 29 (IAS29 - Financial Reporting in Hyperinflationary Economies). In determining the indices, the group considered the movement in the exchange rates and engaged an expert in determining the basket of goods in line with the methodologies previously used by ZIMSTATS. Our assessment recognises the invariable challenges in the methodologies applied as the basket of goods is impacted by multiple exchange rates. The analysis below seeks to demonstrate the sensitivity of the indice used in comparison to indices derived using other methodologies.
IAS 29 provides that each business may determine an index for the purpose of compliance with IFRS. The resultant CPIs were based on the scenarios as disclosed below:
A - Consideration of Interbank Exchange rate in the determination of Indices
This methodology assumed the use of the movement in the interbank exchange rate.
B - Consideration of Internal Exchange rate in the determination of Indices
As communicated per note 9, the Group uses an internally determined exchange rate. This methodology assumed the use of the movement in the internal exchange rate.
C - Use of an Independent Expert
Based on the pricing of general goods independently determined by external experts and data generated by reputable research institutions. The estimates are based on a basket of goods impacted by the different economic fundamentals. The basket of goods and weighting thereof follows the bases used by ZIMSTATS and has been considered as the best estimate of the reflection of the National Consumer Price Index and hence has been adopted for reporting.
Supplementary Information (continued)
14. CPI Sensitivity (continued) | ||||||
Sensitivity Analysis | ||||||
Scenario | C | A | B | |||
*Index Based | **Impact of | ***Impact of | ||||
on expert | Index based | change in the | Index based | change in the | ||
repopulated | on official | conversion | on Internal | conversion | ||
basket | exchange rate | factor (%) | exchange rate | factor (%) | ||
31 March 2023 Estimated Index | 14 500,9 | 16 258,4 | 12% | 15 892,7 | 10% | |
Average March 2023 | 11 618,1 | 11 777,5 | 1% | 11 827,1 | 2% |
- The Group adopted the use of the expert derived index
- Impact of change in the conversion factor if the Index based on the official exchange rate is used instead of the expert-derived index
- Impact of change in the conversion factor if the Index based on the internal exchange rate is used instead of the expert-derived index
- Going Concern
The Directors have assessed the ability of the Group to continue as a going concern and believe that the preparation of these financial statements on a going concern basis is appropriate. The Zimbabwe business is witnessing a significant recovery despite operating in an unstable macro-economic environment. The key factors relate to an unstable currency, high inflation, a turbid political environment, fluid policy framework, and the impacts of global conflicts.
Consumer spending continues to be strongly driven by mining and infrastructure development projects. The business has been able to grow volume across all business units during the period. Management constantly reviews the business risks and the business continuity plans in order to maintain operations at sustainable levels; competitive product pricing, cost reduction initiatives, and adapting sourcing strategies as necessary. United National Breweries (UNB) is on a recovery path from the residual effects of COVID-19 with UNB almost achieving breakeven volumes and cash flows. Management will continue to realign the marketing, route to market, and business operations in general, for sustainability.
Natbrew Zambia has faced funding challenges arising from cumulative financial losses and loss of volume over the years. Management is implementing a business recovery plan over the next 5 years. The significant recovery of volume in F23 demonstrates the positive effects of this turnaround plan. - Impairment Assessment of Assets
Management undertakes the requisite assessments for possible impairment of individual asset or clusters of assets at each reporting period. There were no significant asset impairments in the prior year and current year. - Subsequent Events
There are no subsequent events to report. - Regulatory Approvals
The audited financial statements will be issued post Zimbabwe Stock Exchange regulatory approvals.
Chairman's Letter to Shareholders
Dear Shareholder
Environmental Overview
The Zimbabwean economy recorded modest growth in the reporting period, which was driven by both formal and informal mining, government infrastructure projects and diaspora remittances. Though 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.
The monetary policy interventions such as the increased interest rates, the introduction of gold coins and delays in government payments, temporarily halted the economic turbulence that was experienced during the year. The relative stability in inflation and exchange rates witnessed in the second half of 2022 has unwound in the first months of 2023, with the currency depreciating at a faster pace. The use of foreign currency for domestic transactions increased significantly during the year, spurred by the constrained Zimbabwe Dollar liquidity.
The official exchange rate depreciated by over 500% during the financial year, whilst we estimated year on year inflation at 206% as measured using the total consumption poverty line, which is a proxy for the Zimbabwe Dollar inflation indices.
Consumer spending continued to be buoyant, being boosted by stable US Dollar pricing, and modest improvements in wages and salaries across various sectors. There has been an 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.
South Africa has witnessed slower economic growth being impacted by power supply disruptions, high unemployment, exchange rate volatility, fuel price increases and elevated inflation levels. There are concerns about an anti-immigrant sentiment in some communities and the high incidence of violent crime.
Zambia's policy environment remains promising with significant international investor confidence in the country although consumer spending remains constrained. The firming of commodity prices will have a positive impact on the economy. The debt burden continues to be one of the biggest risks facing the Zambian economy together with the depreciating Kwacha. At the tail end of the year there was concern about the shortage of maize, which may impact the already fragile economy.
The global economies have been impacted by the pass-through effects arising from the supply chain disruptions in the aftermath of the COVID-19 pandemic and higher commodity costs brought about by the war between Russia and Ukraine. There are indications of currency instability and an imminent global recession.
Trading Performance
Lager Beer
Lager beer recorded improved volume performance throughout the year with a growth of 17% compared to prior year, achieving a record volume of 2.2 million hectolitres. The category benefitted from the injection of returnable glass bottles and the improved plant performance. Packaging capacity remains limited, resulting in mismatches of demand and supply of brands and packs. The disruptions in the supply of non-returnable bottles and cans affecting the region are improving which will support one way convenience packs.
The business continues to focus on improving customer service and on increasing consumer facing activities. The installation of an additional packaging plant is progressing to schedule, for commissioning in June 2023 which will underwrite the supply of brands in line with market expectations.
Sorghum Beer
The sorghum beer volume in Zimbabwe grew by 9% for the year. The Chibuku Super supply was constrained by limited production capacity due to disruptions in the supply of power and water.
We Are Delta Corporation - Brighter Together | 4 |
Preliminary Unaudited Financial Information
for the year ended 31 March 2023
Chairman's Letter to Shareholders (continued)
Trading Performance (continued)
Sorghum Beer (continued)
The group also drove the revival of the Scud pack to enhance market supply and address affordability thus improving demand. A new Chibuku Super plant is being installed at the Harare Brewery which is scheduled for commissioning by June 2023. These investments will enable ongoing efforts to leverage on the available production capacity to cover the regional requirements as well as improve the supply of recently launched Chibuku Super Banana, which has excited the market.
The Chibuku brand celebrated its 60th anniversary during the year, which was highlighted by increased consumer engagements through music and sport activations.
United National Breweries South Africa recorded a volume growth of 12% over prior year, with slower growth recorded in the second half of the year. This was attributed to price distortions in the market driven by lack of pricing compliance by traders as a result of higher cost of fuel and distribution costs. Butterworths brewery, located in Eastern Cape province, was reopened during the year to address issues of product supply and the cost of distribution. The impact of the rampant power cuts impact production throughout the year.
Chibuku Super was successfully introduced into the South African market, through supplies from regional units. The commissioning of the Super Chibuku Plant in South Africa is expected by August 2023.
Natbrew Plc (Zambia) recorded encouraging volume recovery in second half of the year to close with a growth of 28% for the year. The recovery is driven by the returnable Scud pack and Chibuku Super Banana. The focus is on stabilising the supply chain and revamping the route to consumer to capture the improved consumer demand for our product. There is concern about the maize supply challenges and the impact of the currency depreciation on import costs.
Sparkling Beverages
The Sparkling beverages volume grew by 10% over the previous year and continued to recover market share despite the currency induced pricing distortions. The growth is anchored by the increased market penetration of the returnable glass packs and better availability of packs and flavours.
There were more pronounced product supply disruptions arising from power and water outages in the second half of the year. The supply of PET packs was constrained and is being addressed through the new plant which is scheduled for commissioning in May 2023. This will allow the supply of the full range of flavours and pack sizes.
Wines and Spirits
African Distillers (Afdis) recorded a volume growth of 18% for the year driven by the ciders ready to drink category, which grew by 23% and Wines, which grew by 16%. The volume growth was underpinned by the improved availability of locally produced brands and a revamped route to market which focused on direct store delivery. The business commissioned a new PET line and localised fermentation of ciders during the year.
The entity continues to receive technical support from partners Distell, which is now part of Heineken BV.
Schweppes Holdings Africa
The volumes at Schweppes were flat for the year, having been affected by shortages of juice concentrates and a prolonged plant breakdown that disrupted the supply of Minute Maid branded juice drinks and bottled water. The currency related pricing distortions affecting formal outlets severely disrupted the route to market.
There was an improvement in the intake of juicing fruit during the 2022 season although the long-term supply positions are affected by the levels of exports of fresh fruit.
Nampak Zimbabwe Limited
The volumes at Nampak Zimbabwe have been steady, riding on the recovery in the beverages and other consumer sectors. The focus remains on stabilising the supply of key imported materials that are affected by developments in the international commodities markets.
Financial Performance
Group revenue increased by 60% to ZW$537 billion in inflation adjusted terms, reflecting the volume gains across business units and the replacement cost-based pricing. Earnings before interest and tax (EBIT) grew by 29 % to ZW$99,79 billion which indicates the benefits of higher throughput and focused cost management.
In historic cost terms, the Group revenue grew by 423% to ZW$452 billion compared to average inflation of 221%. Earnings before interest and tax (EBIT) grew by 371% to ZW$102 billion, reflecting the higher volumes, inflationary stock holding gains and the realignment of cost structures as the economy dollarised. There were some significant increases in costs of fuel, imported raw materials and packaging, driven by the world markets which were impacted by geopolitical developments.
UNB South Africa recorded a near breakeven outturn whilst Natbrew Zambia posted a loss due to depressed volumes. The entities are expected to show an improved performance in the year to March 2024.
Zimbabwe maintained significant contributions in foreign currency takings and has been managing the value chain partners to utilise both currencies. The business has however experienced increased dollarisation of costs. Our business is susceptible to pricing arbitrage opportunities which due to exchange rate volatility impacts currency purchase decisions.
In order to provide users with a better insight into the underlying performance, the board estimates Group revenue at US$712million, up 19% over the prior year, whilst EBIT is indicated at US$140.6 million.
Users should note the inherent challenges of converting the financial statements into a stable currency given the disparate exchange rates prevailing in the country during the reporting periods.
The Group remains cash generative and has funded the on-going capital projects largely from own resources.
Outlook
The election season in Zimbabwe is upon us and will dominate an operating environment that is faced with numerous economic challenges. We anticipate a continuation of the current policy environment anchored by multicurrency trading system with increased dollarisation. The economy will benefit from the improved 2023 agricultural season, the increase in mining activities and the election spending. The increased dollarisation of the economy may result in reduced volatility of inflation and the exchange rate, however there is a risk that increased dollarisation may lead to economic contraction.
There are significant complexities and uncertainties relating to the legislation on pricing, which are exacerbated by the ambiguous and the largely impractical taxation framework. There are also headwinds in the global economy, which are driving commodity pricing and supply disruptions, and the volatility of international financial markets.
Both Zambia and South Africa are facing some challenges although consumer spending is expected to grow, thereby creating opportunities for our entities to recover volume.
The focus remains on leveraging on the ongoing capacity investment projects to exploit any emerging growth opportunities. Aggregate demand will benefit from the recent policies on beneficiation of mineral ore before exportation, diaspora remittances and infrastructure projects.
Advancing Our Sustainability Priorities
The Group remains focused on its sustainability agenda, with increased activities in the areas of responsible alcohol consumption, reduction in waste and pollution, community involvement and optimising resource utilisation. In the current year we have amplified our communication on underage drinking under the Pledge 18 campaign, Make A Difference-Recycle executions and resumed the brand activations supporting sports and culture.
Dividend
The Board declared a final dividend (number 132) of US2.0 cents per share to be paid on 21 June 2023. This brings the total dividend for the year to US3.0 cents per share.
Appreciation
I wish to record my appreciation to management and staff for their great efforts in sustaining the business in the challenging operating environment. I also thank my fellow directors for their wise counsel and our customers, consumers, suppliers, regulators and stakeholders for their ongoing support.
For and on behalf of the Board
-
MOYO Chairman
12 May 2023
Dividend Notice To Shareholders
NOTICE is hereby given that the Board of Directors has declared a Final Dividend, Number 132 of US 2 cents per share payable in respect of all the qualifying ordinary shares of the Company to be paid out of the profits for the current financial year. This will be payable to shareholders registered at the close of business on 2 June 2023. The dividend will be paid by direct transfers or other approved forms of payment as per the following timetable.
ACTION | DATE | |
Announcement Date | 12 May 2023 | |
Last Date to Trade- cum dividend | 30 | May 2023 |
Share Trade Ex Dividend | 31 | May 2023 |
Last Record Date (LDR) | 02 | June 2023 |
Payment Date | 21 | June 2023 |
Dividend Per Share | US 2.0 cent |
By Order of the Board
Ms F Musinga
Company Secretary
12 May 2023
Directors; S Moyo (Chairman), M M Valela* (Chief Executive Officer), E Fundira, C C Jinya, A Makamure*, M A P Marufu, B Mbanga, T Moyo, J Mushosho, R T Rivett-Carnac, L A Swartz, | *Executive
Sable House, Northridge Close, P O Box BW294, Borrowdale, Harare, Zimbabwe, Website address: http//www.delta.co.zw | 5 |
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Delta Corporation Limited published this content on 12 May 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 12 May 2023 16:56:11 UTC.