Johannesburg - South African furniture retailer Steinhoff International on Tuesday reported a 25 percent increase in earnings, bolstered by rand weakness against the euro and a rise in group revenue.
Steinhoff, which runs furniture stores such as Britain's Harveys and Conforama in France, said headline earnings per share for the year to end June totalled 394.8 cents, compared to 315.4 cents the year before.
Headline earnings, the main profit measure in South Africa, exclude certain one-time items.
“The group's reporting currency (rand) weakened 10 percent against the euro during the year,” the company said.
This boosts the size of its earnings when they are converted to the rand.
This can be a double-edged sword as the rand, a highly liquid emerging market currency, is prone to major swings and Steinhoff said “the volatility of the rand exchange rate will continue to influence the group's reported earnings.”
Sales climbed 44 percent to 115.5 billion rand ($11.57 billion), with business in Continental Europe making up the bulk of its revenue.
Turnover in Africa - where retail growth has been surging - doubled to over 47 billion rand but the group said it needed to contain costs on the continent and improve efficiencies to maintain margins.
Shares of Steinhoff were up 3.50 percent 31.30 rand at 15:55 SA time, outpacing the 1.50 percent rise in the JSE's All-share index. - Reuters