Zimbabwe’s Delta Corporation, the country’s largest beverage maker, owes US$63.8 million in foreign creditors and bank loans which were in existence when the country adopted a mono currency early last year.
The company entered into arrangements with the Reserve Bank of Zimbabwe as supported by the monetary authority regulations and guidelines for a systematic redemption of this liability. “A total of approximately US$10 million was paid during the year in line with these arrangements,” group chairman Canaan Dube said in a statement accompanying the results.
“The Board remains anxious to see the end of this foreign currency exposure and notes the difficulties of accounting for the same to achieve fair reporting while complying with IFRS.”However, auditors passed an adverse opinion on the 2019 financial statements as these did not comply with International Accounting Standard 21 (IAS 21). This has
resulted in a qualified audit opinion on the 2020 financial statements, with respect to opening balances. In historical cost numbers, the group revenue rose fivefold to ZWL4.2 billion in the year ended March 31, 2020. This was attributed to inflation induced pricing across all product categories.
Earnings before interest and tax grew by 650% over last year. The net finance cost of ZWL100 million is a result of foreign exchange losses and low deposit interest rates. The company closed the year with a net borrowing of ZWL1.07 billion. Lager beer volume was down 42% on last year. There was a prioritization of returnable bottle packs in an effort to conserve foreign currency and offer the more affordable packs to the consumer.
Sorghum beer dropped 25% on last year. The pricing of the category was driven by the escalation in the cost of imported inputs such as packaging and brewing cereals. Sparkling beverages volume declined by 17% compared to last year. This was on the back of an equally softer last year.