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Massive growth for Delta sales

Lager beers volume for the 12 months ended March 2012 stood at 1 981 million hector litres (hls) as compared to 1 629 million hls recorded in 1998.
Executive Director Finance,  Matlhogonolo Valela, told analysts that revenue gross sales stood at US$654 million.

“This is what went through the tills, although actual revenue after tax and other costs went up 36% to US$554,8 million. Our strategy is to grow sales ahead of volumes always and we are on track,” said Valela.

Since the adoption of the multiple currency regime in February 2009, Delta has continued to experience firm growth despite the lack of disposable incomes induced by a liquidity crunch and high unemployment levels.

Lagers witnessed a 34% growth in sales and a 23% growth in volumes, a development that Valela attributed to a deliberate revenue management strategy.

Incoming chief executive officer, Pearson Gowero, said the company’s premium product category grew 15,6% for the financial year under review, underpinning the drive for value.

Delta’s premium range of products include Golden Pilsener, Bohlingers and Zambezi, all of which experienced growth faster than the traditional mainstream and economy product offerings during the period under review.

“New equipment has been driving maintenance costs down and manufacturing efficiency up,” he said.

He said new products would include local production and packaging of Castle Lite in cans and non-returnable bottles (NRBs) as well as introduction of convenient NRBs for the mainstream portfolio targeting modern trade supermarkets.

“Installation is in progress for a 600khl beer line at Southerton, to be commissioned in August this year,” he said.

Last year in November, the company installed and commissioned a 600 kilo hectolitres (khl) per annum soft drinks packaging plant at Graniteside.

During the period under review, the company spent US$74 million on capital projects (Capex) as part of its efforts aimed at increasing capacity.

Valela said it remained an imperative for the company to focus on attaining a medium to long-term target range of Capex to Earnings Before Interest Taxation Depreciation and Amortisation (EBITDA) figure of 30 to 50% by 2015 at the least.

EBITDA is an appraisal of a given company’s cash before deductions have been made. It is an approximate measure of a company’s operating cash flow based on data from the company’s income statement.

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