SOUTH AFRICA: Distell interim results show growth

A substantial depreciation of the South African Rand towards the end of last year helped boost Distell's international sales revenue, impacting positively on headline earnings, which in turn increased by 36% to R208.9m (US$18.2m) for the six months to December.

According to interim figures released by Distell yesterday, sales volumes declined to about 174m litres compared with 187m litres last year.

Despite this decline sales revenue grew by 5.7% to R2.689 billion from R2.544 billion previously.

The Stellenbosch-based group claims its successes since it merged the interests of Distillers Corporation and Stellenbosch Farmers Winery on 1 July last year, have been validated by its positive figures.

Distell MD, Jan Scannel, said the consolidation of production plants and distribution centres, as well as the restructuring of the sales and marketing divisions have started rendering positive results.

This had helped reduce costs and focussed marketing efforts, particularly to the benefit of key spirit brands on the domestic market. Some of these brands increased volume sales by as much as 6.7%, he said.

Natural wine sales, however, remained constant and Distell's market share in low margin alcoholic fruit beverages suffered under increased competition.

International sales revenues, excluding Africa, increased by 15%, while those from Africa declined by 2.5%

The increase of 15% in trading income was achieved through better gross margins and a reduction in operating expenditure and was reflected in the improvement in net margins from 8.7% to 9.5%.