Zimbabwe: RBZ Facility Enables U.S.$22.5 Million Afdis Debt Settlement

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A facility provided by the Reserve Bank of Zimbabwe (RBZ) has enabled African Distillers Limited (Afdis) to pay US$22.5 million to the South Africa based partner, Distell Limited.

Details contained in the Independent Auditor's report to Afdis shareholders for the period ended March 31 2021 show that the central bank facility enabled the company to settle the payment.

"Through a facility provided by the RBZ, the company made a payment of US$22,5 million to Distell Limited towards payables to Distell Limited related to technical fees, machinery, royalties, inventory items received and reimbursement for guarantee payments made by Distell Limited on behalf of the Company.

"The balance paid was in excess of the total amounts payable thereby resulting in a prepayment of US$ 1,5 million. As at year end, the Company had not utilized this prepayment," the report said.

The company continues to trade with Distell on a predominantly prepayment basis for current stocks whilst there are payable balances for machinery as well as royalties.

The central bank has been working closely with companies with international foreign currency payment obligations as some have had their funds blocked during transitions of reforms aimed at stabilising the economy.

Meanwhile, during the period ended March 31 2021, the company saw volumes growing by 34 % on a comparative nine months period by spirits and ready to drink which grew by 50 % and 22 % respectively.

A new product, Gold Blend number nine launched in the spirit category, was well received by the market thereby impacting positively on the performance of brown spirits.

Wines grew by only 2 % as a result of reduced activity in the restaurant and hotel channel due to Covid-19 restrictions.

Revenue stood at $2.76 billion whilst operating income was 393.58 million.

In historical cost terms, revenue was $2.40 billion whilst operating income was $662.3 million. Growth was attributed to firm demand of company products.

"The good agricultural season is set to benefit the economy by increasing national food supplies resulting in net savings on the import bill, increased foreign currency earnings and improved disposable incomes.

"The company will continue to focus on strategies that will enhance revenue growth opportunities, cost containment measures and improved production efficiencies," Afdis chairman, Pearson Gowero added.

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