Zimbabwe: Govt, Forex Interventions Buoys Afdis
Zimbabwe Stock Exchange-listed alcoholic beverages and spirits manufacturer African Distillers Limited (Afdis) has commended government’s fiscal and monetary policy interventions which allow consumers to settle in foreign currency.
In its quarterly trading update for the period ended September, Afdis said there was a general improvement in the trading environment characterised by stability in exchange rates and prices of goods and services.
“The ability of customers to settle in foreign currency and the foreign currency auction system have brought the well needed relief to the industry and the economy at large.
“The company was able to meet all its demand and satisfy the market requirements owing to the improved foreign currency supply,” Afdis said, adding that the Covid-19 pandemic, however, negatively impacted the economy in the quarter under review as restrictions and prohibitions on travel and social gatherings affected overall demand.
Despite the Covid-19 pandemic, which saw most companies struggling, Afdis registered a volume growth of 28% for the quarter over the same period last year.
The company said spirits and ready-to-drink volumes grew 43% and 24% respectively and wines declined by 38% over the same quarter last year comparative.
Afdis said revenue for the first quarter at ZW$456million (US$5,630 million) increased by 15% in inflation adjusted terms, whilst in historic terms it grew ahead of inflation to 884% compared to the same period in the prior year.
“In addition to the growth in volume, a favourable sales mix which favoured higher valued spirits largely contributed to the good revenue performance,” the company said.
Going forward, Afdis said performance of the economy is largely dependent on the consistency of monetary and fiscal measures put in place by the authorities. The company said its management will continue to focus on protection of market share, innovation and cost management to enhance shareholder value. On the Covid-19 pandemic, Afdis said the extent of the impact of the pandemic on the company’s business performance will depend on many factors including the duration and spread of the outbreak, impact on customers, suppliers, employees, fiscus and government interventions all of which are uncertain, making it difficult to fully estimate its full impact.