Liquor group Distell says SA’s prohibition on liquor sales cost it an estimated R4.3bn in lost revenue during its year to end-June, when volumes fell more than a fifth.
Group profit just more than halved to R394.6m, with Distell saying volumes in SA fell a quarter, with the restrictions on sales having a spillover effect on the rest of the region.
The group had managed to fulfil only 54% of open orders for export purposes since regulations were amended, given local port constraints and customer cancellations caused by the delay at the Cape Town harbour, the group said.
The group deferred over R300m of capital expenditure, while a “painful but necessary” salary reduction of between 10% and 12.5% will be implemented for all SA-based employees from the beginning of September.
“Looking ahead, we anticipate a tough domestic environment, with falling disposable income and increasing unemployment our key concerns,” said CEO Richard Rushton.
“We are, however, confident of the way we are managing the business to remain flexible and recession-proof,” said Rushton.
“Our more focused and diversified portfolio of brands along price points, occasions and innovation in response to consumer trends will enable us to position ourselves well for any recovery,” he said.
Source: BusinessLive
