Distell's feels the impact of the lockdown as revenue contracts 15.4%
DURBAN - The Distell Group in a trading update on Tuesday said that its group revenues contracted by 15.4 percent and its volumes declined by 23.3 percent from July 1, 2019 to June 19, 2020 compared to a year earlier.
The South African government banned the sale of alcohol from March 26 until the end of May in response to the Covid-19 outbreak, but the group said the subsequent easing of export restrictions and lifting of the ban on alcohol sales on June 1 had provided a marked improvement to the financial health of the company and its ability to protect jobs.
Distell is Africa’s leading producer and marketer of wines, spirits, ciders and other ready-to-drink beverages that are sold throughout the world.
The multinational brewing and beverage company said its operations in the Botswana, Lesotho, Namibia and Eswatini (BLNE) regions were also affected by specific country bans on alcohol sales and more than 50 percent of revenues were generated from Namibia where there was a ban on alcohol.
As a result revenues and volumes were adversely affected by 14.9 percent and 20.4 percent, respectively, in those regions.
However, the group’s Africa business outside of BLNE proved resilient, and was led by Kenya Wine Agencies (KWAL).
“Comparative revenues are up 2.3 percent while volumes declined by 12 percent,” the group said.
Its international operations were also negatively impacted earlier in the period as the restricted export of Amarula from South Africa also contributed to overall revenues and volumes declining by 10.3 percent and 15.4 percent, respectively.
The group affirmed its trading statement, which was published on May 15, whereby it said it expected its basic earnings per share (Eps) to decline by between 45 percent and 65 percent for the year to end June, down from last year’s Eps of 396.5 cents a share.
Its headline earnings per share (Heps) was expected to be between 60 percent and 80 percent lower compared to 652.9c reported last year.
Distell will release its results on August 27.