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Distell H1 sales grow by 15.8%

Amarula owner Distell saw revenue rise by 15.8% for the second half of 2021, boosted by double-digit growth in its home market, South Africa.

Amarula owns Bunnahabhain Distillery on Islay
Distell owns Bunnahabhain Distillery on Islay

South African drinks group Distell, which produces Scotch whisky brands Bunnahabhain, Deanston and Tobermory, saw revenue reach R17.8 billion rand (US$1.15bn) for the last six months of 2021. Operating profit increased by 8.7% to R2.3 billion (US$148.6 million).

Distell said its sales growth was achieved despite dealing with challenges associated with Covid-19, rising commodity cost pressures, global supply chain disruptions, a price increase in imported goods, and glass shortages in its home market caused by ‘rampant demand’ for its core spirits and Savanna cider.

Distell’s revenue rose by 22.9% in South Africa with double-digit growth for its cider and ready-to-drink (RTD) portfolio, led by Savanna. Spirits also performed well in the market, notably the group’s gin and vodka brands.

In African markets, outside of South Africa, the company recorded a 0.9% increase.

Revenue in global markets outside of Africa declined by 3.8%, due to Taiwan’s on-trade closures for half of the trading period, the end of the sale of less profitable wine brands and the exit of the RTD business in various regions, the group said.

Distell noted that its premium spirits continued to perform strongly across key markets, particularly its single malt brands, which rose by more than 20% in revenue, alongside growth for Amarula in focus markets.

The company noted that the global travel retail (GTR) channel is recovering as a result of increased international travel.

In November last year, brewing giant Heineken agreed to buy a 65% stake in Distell for €2.2bn (US$2.5bn), excluding the Scotch whisky business.

In its half-year results announcement, Distell said it held a share meeting on 15 February in relation to the Heineken deal, which saw shareholders approve all resolutions by 94%.

The transaction is subject to several conditions, one of which includes Distell not making any distributions, including dividend declarations, to its shareholders. As such, the Distell board will not declare an interim dividend for the six months ended 31 December 2021.

The group said it will continue to improve efficiencies and manage expenses in a bid to off-set the higher commodity prices and imported goods costs. The firm said it is working closely with suppliers to address supply shortages and expects a gradual improvement in supply during 2022.

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