Pick n Pay warns of profit fall due to power cuts

Retailer Pick n Pay has constituted workstreams to limit the effect of load-shedding on the group’s earnings.

This is as the group on Monday warned shareholders that its profit for the 2023 financial year might fall by as much as 18%.

The group said headline earnings per share for the year ended February are likely to decrease by between 12% and 18% using a pro forma measure.

The group said power cuts continued to put pressure on its earnings.

“The impact of unprecedented load-shedding, particularly diesel expenditure to run generators (previously reported to be R346m for the first 10 months of FY23), has had a significant influence on these results,” the retailer said.

“Despite this, the group has contained the earnings impact through holding underlying gross profit margin constant (in the context of a highly competitive market environment) and tight control of trading expenses.”

The retailer, which in February described the current energy crisis as a “permanent new reality,” said it was doing all it could to safeguard the business from the daily power cuts.

“The group remains focused on the successful execution of its Ekuseni Strategic Plan, which includes workstreams to reduce as much as possible the impact of the current levels of loadshedding.”

The group said in February that sales for the first 10 months of the 2023 financial year, covering the 43 weeks from February 28 2022 to December 25 2022, increased 9.3%.

SA sales growth for this period was 9.0%, with like-forlike sales growth of 4.8%.