South African supermarket chain Shoprite Holdings missed half-year earnings forecasts on Tuesday, hit by currency devaluations in the rest of Africa and store closures in Nigeria in the wake of attacks on foreigners.
According to Reuters, the retailer, which owns more than 2,800 outlets across Africa, said diluted headline earnings per share (HEPS) fell by 2.6 per cent to 372.4 cents in the 26 weeks ended December 29, from 382.4 cents a year earlier. Analysts polled by Refinitiv had expected HEPS of 463 cents. HEPS is the most widely watched profit gauge in South Africa, which strips out certain one-off items.
The owner of Checkers and Usave retail chains said it is battling with currency devaluations in Angola, Zambia and Nigeria.
Store closures in Nigeria and subsequent reduction in customer count, both during and after the September attacks on foreigners, “resulted in a difficult half with sales declining by 8.1 per cent in constant currency terms”, the company added.
Last September, Shoprite and MTN closed stores in Nigeria in the face of attacks targeting their premises in retaliation to similar violence in their home country.
This saw sales in rand terms in the group’s international operations, comprising 14 African countries, decline by 3.1 per cent. In constant currency terms, sales rose 4.8 per cent. Trading profit at its African operations plunged 62.3 per cent on the back of a 68 million rand reduction in interest income earned on government bonds and bills.
This was mainly due to Angola Treasury Bills that reached maturity during the reporting period, it added.
The group’s core business, Supermarkets South Africa, was the star performer. Sales rose by 9.8 per cent on an overall basis and 6.6 per cent on a like-for-like basis, boosted by strong liquor sales and its strategy to grow its share of spend in the mid-to-upper segment of the market under its Checkers brand.