Africa-Press – Zimbabwe. AFRICAN Distillers Limited (Afdis) posted a near 41% jump in profit after tax to US$3,59 million for the half year ended September 30, 2025, despite an ongoing tax dispute with the taxman amounting to US$1,8 million.
In June, Afdis managing director Muchaneta Ndachena revealed to our sister paper, Zimbabwe Independent, that the beverage maker saw growth in portfolio expansion to cater for changing consumer trends.
This included the announcement of a US$5 million investment to scale up production of its total beverage capacity from 18 million litres to as high as 36 million litres over the next five years.
Hence, the beverage maker revealed that it would prioritise profitability and margins through brand mix optimisation, market efficiency, and cost control after a “relatively” stable first quarter ended June 30, 2025.
The increase in profit after tax for the period under review is from a 2024 comparative of US$2,55 million.
“The company registered revenue growth of 54% to US$40,4 million in line with the increase in volume,” Afdis chairman Matlhogonolo Valela said in a statement attached to the half-year report ended September 30, 2025.
“Operating income at US$5,7 million was 280% above prior year while cash generated from trading amounted to US$5,9 million in the period under review.”
He said fixed assets rose by 42% to US$7,6 million, reflecting an investment of US$2,7 million in capital expenditure, which was aimed at increasing production capacity and enhancing operational efficiency.
“The company achieved a robust 43% increase in volume compared to prior year, with wine, ready-to-drink (RTD) and spirits growing at 59%, 47% and 36% respectively,” Valela said.
“This strong performance was driven by sustained demand across all categories, supported by the improved consumer spending and the clampdown on informal imports and illicit products. Volume was further boosted by strong market penetration and brand building initiatives.”
The firm recorded an increase in inventories to US$15,96 million for the period under review, up from US$11,38 million in 2024.
This growth helped lift total assets to US$35,83 million, compared to US$26,91 million in March.
Consequently, Afdis maintained a current ratio of 1:1,64 indicating a strong liquidity position and sufficient capacity to fund its capital expenditure programme.
“Management continues to prioritise business growth and profitability by expanding market share, product innovation, improving production efficiency, and controlling costs,” Valela said.
“There are ongoing projects to expand and upgrade plant and equipment to meet the growing demand of our product offerings.
“The board has recommended an interim dividend of US$0,0050 per share amounting to US$622 860.”
However, Afdis continues to face an unresolved tax dispute with the Zimbabwe Revenue Authority (Zimra) over legacy income tax assessments for the 2019 to 2022 period.
The taxman issued an additional US$1,8 million assessment, including penalties and interest, arguing the payments should have been made exclusively in foreign currency.
The company has since remitted about US$1,4 million under the “pay now, argue later” principle while pursuing legal and technical engagements with Zimra to resolve the matter.
“We believe any revisions to the payment plan will be rational, taking into account the financial health of the business and the fact that the principal amounts were fully paid in legal tender at the relevant periods, based on the best available interpretation of the legislation,” Afdis said.
It added that there were still areas that required clarity and adjustment in the assessments raised.
“Management continues to engage with Zimra while appealing certain areas of the assessments and the judgments, with guidance from tax experts and legal counsel,” Afdis said.
“This assessment could have a material impact on the company’s operations if it materialises as per the extant assessments.
“The outcome of these engagements will determine the accounting treatment and recognition of the assessment and payments made to date.”
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