Delta Corp ready to distribute interim dividend, despite volume decline
HARARE – Shareholders in Zimbabwe’s Delta Corporation – which manufactures soft drinks and alcoholic beverages – will receive a ZWL86.1 million (about R84.12m) interim dividend, in spite of a decline in volumes across its beverage categories.
Delta Corporation announced yesterday that the payment of an interim dividend was despite economic difficulties during the half-year period to end September.
The company, which is among the blue chips on the Zimbabwe Stock Exchange, has delayed its comprehensive half-year financials owing to currency changes in Zimbabwe.
It has, nonetheless, declared a 6.75 cents (ZWL) interim dividend, with analysts saying listed companies are seeking to speedily dispose of cash holdings to manage value loss owing to the continued volatility of the Zimdollar. Zimbabwe will introduce new Zimdollar notes later this month.
“Notice is hereby given that the board of directors has declared an interim dividend of RTGS (ZWL) of 6.75c per share, payable in respect of all the qualifying ordinary shares of the company to be paid out of the profits for the current financial year,” said Alex Makamure, a company secretary for Delta Corporation.
The total dividend payment amounts to ZWL86.1m and will be paid on December 4, 2019, “by direct transfer or other approved forms of payment”.
It was not immediately clear if Delta will manage to remit dividends to foreign shareholders who have previously encountered challenges in remitting their dividends from the country, which is battling a lengthy financial crisis worsened by foreign currency shortages.
Delta’s volume performance for the period under review saw lager beer volume decline by 40 percent for the quarter to end September and by about 48 percent for the half-year period.
“The pricing for this category has been moderated to maintain affordability, given the prevailing economic challenges. The sorghum beer volume in Zimbabwe declined 15 percent for the six months,” said Makamure.
The company’s soft drinks manufacturing business was also affected by the obtaining economic environment in Zimbabwe, with volumes for the half-year softening by 56 percent.
The company did not provide actual figures for the volume declines, as it awaits further guidelines from the Public Accountants and Auditors Board on “financial reporting standards in hyper inflationary economies”.
Raw material accessibility remains a challenge for the company. Delta Corporation is set to finally renew its bottling agreement with the Coca-Cola Company for a new term to the end of September 2020.
“There are still challenges in sourcing imported raw materials and services due to the mixed performance of the (official) interbank market and difficulties in accessing materials as foreign suppliers remain jittery on account of overdue payables,” the company said.
As a result of this, the company’s African Distillers associate is now launching “products with a lower foreign currency content” to manage the situation.