Massmart reports loss of R1.753 billion

Massmart reports loss of R1.753 billion

Retail company Massmart has recorded a net loss of R1.753 billion ($114.18 million), citing lockdown restrictions and retrenchment costs. In 2019, the group reported a loss of R1.3bn for the same period.

On Monday, Massmart announced that its total sales of R86.5bn for the 52-weeks ending in December last year represented a decline of 7.7%, with a 7.5% decline in comparable-store sales.

The wholesaler, which is owned by the multinational grocer, Walmart, estimates that the coronavirus pandemic cost the company R6.1bn in lost sales last year. The company said it was battling to turn around some of its unprofitable businesses.

According to the report, lockdown restrictions weighed heavily on the company’s ability to sell certain products such as alcohol and tobacco as the sale of the items was prohibited.

The headline loss for the period is R0.9bn compared to a headline loss of R1.2bn during the same period in 2019.

The company said fluctuations in the rest of Africa currencies continued to negatively impact the group, especially concerning foreign-denominated leases and payables. "These contributed to the foreign exchange loss of R381.1 million."

Massmart opted to not pay dividends as its loss widened by about a third to R1.75bn. The company last paid dividends in 2018 when it offered shareholders the option of shares or cash.

The company said it expected the uncertain operating environment, constrained consumer's financial health position and negatively impacted economy related to the Covid-19 pandemic to persist.

"While trade in all our categories is currently permitted, the imposition of new restrictions remains uncertain," the report states.

Massmart comprises of two business units operating 423 stores, in 13 sub-Saharan countries.

BUSINESS REPORT ONLINE