Delta Corporation is a Zimbabwe based beverage manufacturer and the sole distributor of Coke products in the country also it is one of the country’s solid performers on the stock market. A few days ago Delta Corporation announced its financial results for the interim period ending 30 September 2011 and nearly every aspect of the company’s performance underlines why it is one of the most stable and best performing stocks on the Zimbabwe Stock Exchange.
Major highlights include an increase in revenue from $181.29 million for the six months ending September 2010 to $254.81 million for the corresponding period ending 30 September 2011 an increase of 41%. In actual volume terms beverage volumes were up by 23% overall with lager beer and sparkling beers leading the way 30% and 33% respectively. Delta attributes this performance to the stable macro-economic environment that currently prevails. However interestingly Delta believes the communal and small scale farmers growing cash crops such as tobacco and cotton contributed significantly to its revenues as the increased disposable incomes resulted in more people in this category buying Delta’s products.
In terms of profitability, the operating income grew by 48% to $40.4 million during the period under review as the company’s costs grew slower than revenues. Consequently the dividend during the period went up by some 66% to 0.83 cents while total assets grew by 32% due to expenditure of $82 million. While the stable economic environment ensured this kind of performance things could have been markedly better had the perennial problems which have afflicted the economy for years been dealt with.
Power outages and shortages continue to be a challenge to Delta just like every other company causing disruptions to production and farming operations. Liquidity problems also continue to be a factor although in Delta’s case borrowings grew to $40 million at interest rates below 10% per annum which is significantly lower than current market rates of 30% to 40%. There is therefore a need for government to make real efforts towards ending or limiting the impact of these factors on economic activities because doing so may potentially accelerate the rate of economic recovery.
On the stock market Delta Corporation is the most heavily capitalised stock at about $800 million and along with Econet and Innscor they are the well-recognised blue-chip counters that have annual revenues at or approaching $500 million. Delta Corporation believes with the current economic environment expected to remain in place, it will continue to drive profitable volume growth while focusing on the delivering on all its goals. For more information on these results you can log on to www.delta.co.zw