Johannesburg - Wal-Mart's South African unit Massmart reported a 9.9-percent fall in first-half profit on Thursday as debt-laden consumers at its home market cut down on spending.
Massmart, which sells everything from groceries to televisions, said headline earnings per share before currency swings totalled 181 cents in the six months to end-June compared with 201 cents a year earlier.
Headline EPS, South Africa's primary profit gauge, excludes certain one-off items.
Massmart, which generates nearly 10 percent of its sales in several African countries outside South Africa, said favourable currency swings added R134-million to the bottom line, causing headline EPS to increase by 52 percent.
Sales increased 8.9 percent to 32.4 billion rand and the company maintained its dividend payout at 146 cents per share.
After more than two years as an investor favourite, South African retailers are fast falling out favour due to concern that high personal debt levels and reluctance among banks to lend more will squeeze spending in Africa's biggest economy.
“There's little on the macro-economic horizon that suggests any improvement,” said Massmart, which is 51 percent-owned by Wal-Mart. “We believe the remainder of the year will continue to see sales under pressure.”
South African retail sales grew by a smaller-than-expected 1.9 percent in June, data from the government statistics office showed last week.
Shares in Massmart are down about 20 percent so far this year, lagging behind a 10-percent gain in Johannesburg's All-share index. - Reuters