Massmart warns of bigger half-year loss due to lockdown

By Emma Rumney Time of article published Jun 17, 2020

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JOHANNESBURG - South Africa’s Massmart expects its half-year loss to widen at least 50% because of a substantial hit to its sales from a nationwide coronavirus lockdown, the retailer said on Wednesday.

The company, majority owned by Walmart, was already struggling as consumer finances come under strain in South Africa and reported its first trading loss in two decades in August last year.

It said on Wednesday that the nine-week-long strict lockdown this year cost it 4.6 billion rand ($267.08 million) worth of sales, pushing total sales 10.3% lower in the 23 weeks ended June 7 despite some pent-up demand as stores re-opened.

The company’s headline loss per share for the 26 weeks to June 28 would likely be at least 182.4 cents wider than the year-earlier loss of 364.7 cents, it said, with operating costs also rising as it spent 50 million rand on safety protocols.

Headline earnings per share is the main profit measure in South Africa.
South Africa’s Massmart expects its half-year loss to widen at least 50% because of a substantial hit to its sales from a nationwide coronavirus lockdown, the retailer said on Wednesday. File image.
“Massmart’s balance sheet remains strong and ... the Massmart Group has sufficient cash facilities and resources to meet its obligations,” it said in a trading statement, adding it had secured a 4 billion rand loan from Walmart.

The impact of the virus has accelerated some of the turnaround strategies it announced earlier in the year, especially a plan to slash costs and restructure into wholesale and retail units, it said.

Massmart’s half-year results will be published on August 27.

REUTERS 

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