South African drinks maker Distell said on Friday 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.
The company, which makes wines, spirits and ciders, said the restrictions in South Africa in particular had had a significant impact on its business. The country has enforced one of the world's strictest lockdowns in response to the pandemic, including outlawing all alcohol and cigarette sales.
Distell said as a result its headline earnings per share (HEPS) - the main profit measure in South Africa - would be between 60% and 80% lower in the year to June 30. It reported HEPS of 652.9 cents a year earlier.
It added that this was based on currently available information and liable to change dependent on factors including what restrictions remain in place as the lockdown eases and any credit losses.
Distell was pursuing an ambitious plan to expand across Africa in hopes of becoming the continent's premier drinks brand. It said it is now focused on minimising the financial impact of the coronavirus on its shareholders.
It said these efforts included a 2.85 billion rand ($154.9 million) increase to its banking facilities, an extension on excise duty payments and the deferment of 300 million rand of its capital expenditure programme so far, with all discretionary spending stopped.
"These actions give us confidence to manage the short-term challenges in order to position ourselves for a recovery once trading environments normalise," it said.
Its shares were up 0.41% by 0722 GMT.
($1 = 18.3958 rand)
(Reporting by Emma Rumney; Editing by Edmund Blair and Emelia Sithole-Matarise)
