South Africa’s Distell Group reports 18% rise in Half-Year (H1) profits as festive discounts, exports lifts sales

South Africa’s largest wine and spirits producer Distell Group Ltd, said on Wednesday that half-year profits rose 18%, helped by holiday wine discounts and higher earnings from exports due to the weaker rand currency.

The company, which also makes ciders such as Savanna, Hunter Gold, Hunter Dry, among others, said that sales by volume climbed 7.7% in the six months through December, compared with 3.7% a year earlier.

It noted that 14.6% of the sales rise was at home, while the weaker rand currency boosted export sales. Distell gets 74% of its total revenue from the home market, where consumer spending has been under pressure from inflation and high unemployment.

The company also noted that sales volumes in international markets, excluding Africa declined by 15%. Distell saw a drop in wine sales in the U.K.

In Africa, exports to Angola, which historically accounts for 50% of the company’s sales on the continent fell by as much as 50% due to macroeconomic challenges (weaker currency and lower oil revenue) and the imposition of higher excise and import duties by the government, with tighter restrictions being placed on access to import permits.

Distell said it is expanding in the U.S. with an agreement to combine spirits with beverages from family owned Terlato Wine Group Ltd.

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