Delta Corporation saw its net income decline by 20% to $35 733 000 in the six months ended September 30 on low revenue attributed to declining consumer spending in a harsh economic environment.
In the same period last year, net income was $45 007 000.
Revenue decline by 8% to $269 million due to changes in the portfolio mix, volume declines and the recent price moderations.
In the comparable period last year, revenues were $291,4 million.
In a statement accompanying the group unaudited results, Delta’s company secretary, Alex Makamure said the trading environment remained difficult due to pressure on discretionary income and the resultant depressed consumer demand.
“We do not anticipate any improvement in the operating environment during the remainder of the financial year. Our focus is on measures to generate revenue and reduce costs. We continue to engage our suppliers of goods and services and indeed our people to streamline cost structures in order to survive in this difficult economic environment,” Makamure said.
In the period under review, total lager beer volumes were down 2% while sparkling beverages were down 15%. Maheu and dairy mix volumes recorded a growth of 4%. Sorghum beer recorded a volume decline of 12% in the period under review.
Makamure said operating income was down 20% largely due to the loss of financial leverage arising from the volume and revenue losses.
He said for lager beer, the sales mix was in favour of value brands and packs, which impacted on margins but kept consumers in the category, adding that the ongoing interventions to reduce value chain costs would alleviate some of the pressure.
Earnings before interest, depreciation tax and amortisation decreased by 16% compared to 20% in operating income indicating that fixed costs were contained at levels below prior year. Associates income was up 37% reflecting inclusion of the new associate, Nampak Zimbabwe, and the profitability of both Afdis and Schweppes.