DELTA had a strong half at home, and the numbers show it.
Revenue rose 18% to US$607.5 million, and shareholders get an interim dividend 20% bigger than last year’s.
Management told analysts on Wednesday that global costs keep climbing and are eating into margins, but the company is absorbing most of that rather than passing it on to customers.
For the six months to 30 September, operating income rose 13% to US$112.2 million, and EBITDA also grew 13%, to US$126.8 million.
Profit before tax came in at US$115.3 million against US$104.8 million a year earlier, and profit for the period reached US$80.1 million, up from US$75.1 million. Headline earnings per share climbed 15% to 5.91 US cents, and the interim dividend rose to 2.40 cents from 2.00.
Profit did not keep pace with sales, though. Operating margin slipped to 18.46% from 19.37%, and EBITDA margin to 20.88% from 21.86%. The effective tax rate also edged up, to 30.54% from 28.35%.
Almost all the growth came from Zimbabwe. Total beverage volumes rose 8% to 7.0 million hectolitres, and the home market carried most of that. Lager remains the biggest earner at 40% of revenue, or US$245.3 million, up 20%, with volumes up 13% to 1.75 million hectolitres.
Sorghum beer did better still. Zimbabwe volumes grew 19%, and Chibuku Super jumped 27%. Delta credits steady demand, stable pricing, cash from mining and the tobacco season, and wider distribution. Leopard Extra is also gaining traction as activations scale up.
Sparkling drinks were less clear-cut. Revenue rose 13% to US$152.6 million, yet volumes slipped 2%. Cordials and juices grew 29%. Wines and spirits grew fastest of all, with revenue up 40% to US$56.5 million and African Distillers volumes up 35%.
Outside Zimbabwe, the picture is tougher. In Zambia, sorghum beer volumes fell 17%, held back by unregulated alcohol, route-to-market problems and a resurgence of illicit brews. The detail held some good news: packaged products now make up 95% of volume, and steadier power, a firmer kwacha and cheaper cereal and imports narrowed the loss.
South Africa fared worse, with volumes down 22% after social unrest. Fuel costs pushed prices up and hurt affordability. The Isithebe brewery is now running, which brings production closer to the coastal market. For both countries the plan is the same: rebuild distribution and restore profits that last.
Delta is also spending far more than a year ago. Capital expenditure more than doubled to US$47.2 million from US$20.5 million, yet net cash ended the half at US$56.2 million, compared with US$40.5 million at 31 March. The money is going into upgrades at Southerton and Belmont, returnable glass and crates, and extra packaging capacity at Afdis in the second half. Delta says it will fund the critical projects from its own resources.
The tax dispute isn’t going away. Delta paid US$193.3 million in taxes in Zimbabwe during the half, up 31%, and called itself an exemplary taxpayer. It is still contesting foreign-currency tax assessments for 2019 to 2024, which total about US$97.0 million. Under a “pay now, argue later” arrangement, US$22.8 million has been paid, leaving roughly US$74.2 million under appeal.
The Supreme Court has upheld the validity of the 2019 to 2021 assessments, but the fight over quantification, methodology and how the currency should be treated remains before the Fiscal Court. The 2024 VAT application is still pending. Delta says it can’t yet say when or how this will end.
On demand, management sounds fairly upbeat. It points to a steadier currency, easing inflation, mining activity, better agricultural output and diaspora inflows. The market rate was ZWG28.00 to the US dollar in September 2026, against ZWG30.00 a year earlier.
Costs are the bigger worry. Oil, freight, fuel, PET and imported raw materials all remain concerns, as do the sugar tax, grey imports and cheap unregulated alternatives. The price charts shown to analysts made the point: can bodies, resin, fuel and PET closures all jumped in F27 after a flat or falling few years.
Nampak Zimbabwe, one of Delta’s associates, had a disappointing half, with higher resin and fuel costs and power cuts pulling results below expectations. Delta says it is watching the disposal process announced by Nampak’s majority shareholder.
