File picture: Philimon Bulawayo
File picture: Philimon Bulawayo
File image
File image
FILE - In this June 5, 2017, file photo, a shopper looks at merchandise at a Walmart in Salem, N.H. Wal-Mart Stores, Inc. reports earnings, Thursday, Aug. 17, 2017. (AP Photo/Elise Amendola, File)
FILE - In this June 5, 2017, file photo, a shopper looks at merchandise at a Walmart in Salem, N.H. Wal-Mart Stores, Inc. reports earnings, Thursday, Aug. 17, 2017. (AP Photo/Elise Amendola, File)

JOHANNESBURG - Massmart Holdings Ltd., the South African grocery and general goods retailer owned by Wal-Mart Stores Inc., said tougher control of costs wasn’t enough to prevent earnings falling during “the most difficult trading conditions in recent memory.”

First-half operating profit before interest declined by 6.6% to 765.1 million rand ($58 million), the Johannesburg-based company said in a statement on Thursday. Sales increased
0.5 percent to 42.5 billion rand. The retailer raised the interim dividend by 2.6 percent to 0.76 rand a share.

Looking ahead, “continued high levels of economic volatility and political uncertainty complicate any useful outlook, however it is likely that sales growth may improve slightly in the second half of 2017,” Chief Executive Officer Guy Hayward said in the statement. “This improvement comes from a combination of lower inflation, a steady rand, lower interest
rates in South Africa, and higher reported rand sales” elsewhere in the continent.

Retailers have struggled to offset sluggish trading in South Africa, where consumer confidence has deteriorated after weak economic growth was compounded by high food inflation last year and the country’s economy slid into recession in the first quarter of 2017.

The stock fell 0.9% at close on Wednesday to 124.84 rands, and has declined 1.1% this year. The 11-member FTSE/JSE Africa General Retailers Index has decreased 0.7%.

- BLOOMBERG