Shoprite interim earnings down 2.6%, sees no material impact from coronavirus
JOHANNESBURG - Supermarket chain Shoprite on Tuesday reported a seven percent increase in the sale of merchandise to R81.2 billion in the six months to December, but its diluted headline earnings per share declined by 2.6 percent to 372.4 cents.
The retail group said it was managing the risks associated with the coronavirus disease (COVID-19) currently wreaking havoc across the globe and did not foresee a material impact on the business.
Despite the current difficult economic climate, Shoprite continued to create new jobs and participate in the Youth Employment Service programme, an initiative between businesses in South Africa, the government, labour, civil society and young people, chief executive officer Pieter Engelbrecht said.
The company's interim earnings before interest, tax, depreciation and amortisation increased by 5.3 percent to R6.8 billion, while trading profit on a reported basis fell 3.9 percent to R4 billion.
The seven percent rise in interim merchandise sales was achieved on the back of a 4.4 percent growth in the volume of products sold and a 2.1 percent expansion in the number of customers, said Engelbrecht.
"Our group strategy to capture a larger share of South Africa’s premium food retail segment continues to be one of our drivers of growth as reflected particularly in the Checkers brand, together with Hypers, growing sales by 11.2 percent," he said.
Shoprite supermarkets in the non-South African operating segment, comprising operations in 14 countries across the African continent, recorded positive sales growth of 4.8 percent in constant currency terms. In rand terms, however, sales declined by 3.1 percent.
"Supermarkets Non-RSA’s operating environment is expected to remain challenging until such time as currencies stabilise and consumer affordability catches up," Shoprite said.
"In terms of future strategy we remain committed to operating on the continent but are limiting future expansion whilst we review our options with regards to alternate operating models. Notwithstanding this, we have taken a number of immediate operational actions, all of which are ongoing and include rent reductions, store closures, productivity improvements and de-dollarising costs."
- African News Agency (ANA)