Afdis focuses on production efficiencies

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AFDIS says it is targeting to increase production efficiencies and implement cost containment initiatives this year to improve profitability.
This comes as the spirits and wines maker anticipates that the trading environment will remain challenging and uncertain this year.
In a statement to accompany financial results for the full year ended March 31, 2023, Afdis chairman Matlhogonolo Valela expressed optimism that there would be growth opportunities for the company this year.

“The company will continue leveraging on ensuring full product availability, market share protection and brand portfolio expansion for business growth. Focus will also be on production efficiencies and cost containment initiatives,” he said.
For the period under review, Valela said the operating environment was complex and uncertain, characterised by high inflation, high interest rates, and increased power supply outages.
“Measures introduced by the government to reduce ZWL liquidity resulted in relatively stable foreign exchange rates except at the tail end of the year where accelerated depreciation was witnessed resulting in increased value chain costs.
“The market witnessed an increased US$ transaction flow which helped in sustaining the company’s working capital requirements,” he added.
Valela said the acquisition of a major shareholder and partner, Distell by Heineken BV has been approved and implemented with effect from April 26, 2023.
“The company continues to receive support from Distell in line with the existing franchise and technical arrangements. It is anticipated that no adverse changes will arise from the acquisition,” Valela further said.
For the period under review, Afdis volume growth was strong at 18 percent above the prior year mainly driven by the ready to drink (“RTD”) segment which grew by 23 percent.
Wines and spirits volumes grew by 16 percent and 14 percent respectively due to the increase in volume due to improved product availability, increased market penetration and promotional activity.
In inflation-adjusted terms, Afdis revenue increased by 56 percent to $41 billion whilst operating income increased by 15 percent to $5,4 billion. In historical cost terms, revenue increased by 418 percent to $34,2 billion whilst operating income increased by 316 percent to $7,5 billion. Valela said revenue growth was driven by increased volume.
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