Brewer SABMiller reinstates Zimbabwe in results
Britain-based brewer SABMiller announced on Monday that its Zimbabwe division has been reinstated into the group's official results after a turnaround in the troubled nation's economy.
"Following the stabilisation of the economy in Zimbabwe after the effective adoption of the US dollar as its currency, we have included our share of Zimbabwe's volumes and results for the first half of this year," SABMiller said in a statement.
The drinks giant also revealed that its total lager volumes rose by one percent in the first half of its financial year, or six months to September, amid a slowdown in developed markets.
But lager sales fizzed 11 percent higher in Africa, boosted by Zimbabwe unit Delta Corporation. Stripping out Zimbabwe, African sales grew by a solid 7.0 percent. Asian volumes jumped ten percent while Europe fell five percent.
SABMiller, which owns 36 percent of Delta, stopped adding the division in its official results four years ago amid chronic foreign currency shortages and economic chaos.
Zimbabwe's economy was hit hard by hyperinflation during a decade-long freefall which impoverished the country. But prices have stabilised since the nation's government abandoned the worthless local currency last year.
"Managing the company over the last eight years has been the business equivalent of white water rafting," said Delta chief executive Joe Mutizwa in a separate statement.
"The challenges have been large, varied and relentless. The demands have been many ... requiring perpetual vigilance and constant adaptation.
"The greatest reward, for me, has been to assist young managers to take charge of the destiny of the company in the middle of a blinding macro-economic sandstorm."
He added: "We are now better placed to face new and different challenges going forward."
Delta is Zimbabwe's biggest brewer and soft drinks bottler, with key brands including Castle Lager, Eagle, Lion Lager, Carling Black Label, Golden Pilsener, Bohlinger's and Chibuku.
Zimbabwe's economy has shown signs of recovery since the formation of a power-sharing government last year by President Robert Mugabe and long-time rival Morgan Tsvangirai. The economy grew by 4.7 percent last year, ending 12 years of contraction.
With SABMiller owning just over a third of Delta, the rest is carved up between British insurer Old Mutual, which owns around 22 percent, and local institutional investors in Zimbabwe, according to a SABMiller spokesman.
"All credit goes to the Delta management team, whose efforts in keeping the business running in the last few years have been little short of heroic," added Mark Bowman, managing director of SABMiller Africa.
"Despite extreme hardship and untold obstacles, they have continued to supply Zimbabwean consumers with quality products and to secure the livelihoods of many thousands of people, either directly employed by the business or dependent on it for a living."
SABMiller, like many brewers around the world, has seen sales hit in recent years as the global economic downturn dented consumer demand for alcohol in developed nations.
However, the London-listed company has drawn strength from its broad base across emerging markets.
SABMiller, whose products also include Coors Light, Grolsch, Peroni, Miller Lite, Nastro Azzurro and Pilsner Urquell beers, added that its overall performance in the first half was in line with expectations.
"Half-year financial results will benefit from prior-year net price increases, some raw material cost reductions and the strength of key operating currencies against the US dollar," the spokesman added.
© 2010 AFP