AXIA Corporation’s subsidiary, Distribution Group Africa (DGA) regional operations in Zambia and Malawi resulted in improved volume performance during the six months to December 31, 2023 to after a lacklustre performance by the local unit.
DGA is a distribution and logistics concern with its core expertise in inbound clearing and bonded warehousing, ambient and chilled/frozen warehousing, logistics, marketing, sales, and merchandising services.
The Zimbabwean distribution group houses several leading brands such as Colgate, Kellogg’s, Johnson & Johnson, Tiger Brands, Unilever, Rhodes, Pioneer, Irvines, Probrands, and Pepsi.
DGA-Zimbabwe volumes for the period fell 39 percent from comparative period resulting in a decline in revenue.
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“Trading was depressed due to formal traders failing to adhere to agreed payment terms, which adversely affected the working capital cycle of this business as most of its products are imported,” said group chairman, Luke Ngwerume in a statement accompanying Axia half year financial results.
However, the regional operations were able to offset the volume slump by the local unit.
DGA-Malawi recorded a 26 percent volumes growth over the same period resulting in revenue growth of 42 percent in US$ terms and 90 percent in Kwacha terms against same period last year.
“Management remains focused on plans to generate foreign currency to settle foreign suppliers so as to improve trading,’
DGA-Zambia recorded a marginal two percent uptick in volumes over comparative period resulting in a turnover increase of 18 percent in Kwacha terms and a seven percent decline in US$ terms.
The gross margin percentage, however, decreased due to sustained margin pressures from large customers.
The Zambia Kwacha has depreciated 22 percent against the US Dollar and 24 percent against the South African Rand from the end of the September 30, 2023 quarter to the end of the December 31, 2023 quarter.
“The group continues to implement strategies to increase its volumes in the Distribution business in Zimbabwe by serving both the formal and informal market channels,” said Ngwerume.
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