Massmart ups sales in tough market
Walmart’s South African unit Massmart reported a 19% increase in half-year profit yesterday, as consumers delayed buying appliances, but keep spending on food and other nondurables, the company said.
Massmart posted diluted headline earnings per share before forex for 26 weeks to June 26 of 145.8c.
The figure had gone up from 124.2c.
Sales rose 8.7% to R42.31 billion, beating inflation even as the company said consumers were delaying purchases in South Africa’s zero growth economy, trading down and reducing spending on durable goods to support spending on semi- and nondurables.
“This has meant general merchandise sales have softened, while food sales have been stronger,” the firm said.
For the 34 weeks to August 21, total sales increased by 8.3% and comparable sales increased by 5.9%.
Massmart says it plans to open five new stores in the rest of Africa in the next two years, expanding in Ghana, Mozambique, Nigeria and Zambia.
Looking ahead, trading conditions in most non-SA countries, where Massmart has stores, are unlikely to deteriorate further, provided there are no exogenous shocks.
But trading in 2017 could be better if the rand strengthens, the company said.
Massmart reported a dividend per share of 74.1c, down by 49.2% over a comparable period. –