Delta Corporation recorded an 11 percent increase in revenue in the half year to September 2024 to S$389,1 million, largely driven by sparking beverages and lager beers, which grew by 10 percent and 9 percent, respectively.
Profit before tax rose by 63 percent to US$55,8 million due to lower exchange losses, although overall profitability was impacted by declining operating income (down 12 percent) due to regulatory and operational cost pressures.
The Zimbabwean operations were affected by some operational challenges that included the impact of drought on raw material costs, disruptions to formal sector trading due to restrictive route-to-market policies, price competition against grey imports, high utility costs and loss of value on account of ZIG devaluation.
However, the company's performance during the first half of 2025 underscores its ability to sustain growth through operational agility and strategic market positioning, despite the restrictive external environment.
Delta's effective management of its beverage segments, coupled with its willingness to absorb certain regulatory costs like sugar tax, reflects a focus on maintaining market share.
"The Lager beer volume grew by 9 percent over prior year for the half year as demand remained firm and benefitted from the consistent supply of brands and packs. There were some disruptions to supply arising from increased water and power outages as well as an unavoidable maintenance shutdown at Belmont Brewery.
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"We are focussed on driving the category against competition from alternative forms of alcohol, particularly the lower-end spirits," said Delta chairman Mr Sternford Moyo in the group's statement of financial performance.
However, regulatory pressures, utility costs, and credit constraints indicate that Delta's profitability and margins remain under stress. And these factors could weigh more heavily on long-term sustainability if unaddressed.
Delta is one of the key entities in Zimbabwe's economy, not only as a major contributor to employment, taxes, and infrastructure but also as a stabilising force in the consumer goods supply chain. The group's revenue for the six months increased by 11 percent to US$389 million compared to the restated prior year figures for the same period while profit before tax closed at US$55,8 million.
According to Delta, the proportion of domestic sales undertaken in foreign currency declined from an average of 88 percent in the prior year to around 77 percent in the period under review.
This shift is largely attributed to the introduction of the ZiG currency, the strict enforcement of dual pricing regulations and increased sales to the formal retail sector which largely trades in local currency.
Trading margins in the period under review were partly affected by the sugar tax and higher cost of imported maize.
According to Delta an equivalent of US$20,5 million was paid as sugar tax by Delta Beverages and Schweppes Zimbabwe for the period February to September 2024.
