Alcohol Maker Distell May Invest in a new Sanitiser Business

The company, which makes wines, spirits and ciders, also informed investors that its full-year profits could drop by up to 80% due to the impact of the coronavirus, which has seen alcohol sales banned in its home market since March.

Richelieu brandy
Richelieu brandy Image source: Goal

Distell, the R17.3 billion South African alcohol empire behind Savanna cider, Amarula, Oudemeester and Bernini, is looking at expanding its business into the lucrative sanitiser market.

Last month, Distell began producing hand sanitisers and other hygienic products at its production facilities as part of its efforts to help curb the spread of the COVID-19 pandemic.

Distell announced on Friday it has donated 105 000 litres of sanitiser to both the South African government and NGO’s to support the need for responsible self- isolation and good hygiene practices in vulnerable communities.

It has also generated R8 million worth of revenue from the sales of alcohol and sanitizer since the lockdown to a range of businesses to support their own hygiene practices and/or for resale, the maker of Richelieu informed investors on the JSE.

“As a result of the short-term success and order pipeline, the group is investigating this as a sustainable business opportunity going forward.”

The company, which makes wines, spirits and ciders, also informed investors that its full-year profits could drop by up to 80% due to the impact of the coronavirus, which has seen alcohol sales banned in its home market since March.

As a result, Distell says it expects headline earnings per share (HEPS) to be between 60% and 80% lower in the year to June 30. HEPS is South Africa’s main profit gauge.

The group also added that it has resumed limited operations in certain locations related to production and transport for export purposes only, in line with Level 4 regulations.

“The easing of export regulations related to agricultural products in Level 4 meant that approximately R440 million worth of open orders can now be processed for delivery to customers and operations in geographies with open ports and no restrictions on the sale of alcohol,” Distell said.

“Production in relation to our export business has also begun at a reduced capacity. The Group will leverage this opportunity to generate revenues notwithstanding the bottlenecks that are being encountered at the ports and with current transport regulations in South Africa.”

Also read: Coronavirus: Distell to Supply Sanitisers to Vulnerable Communities

 

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