- Currency Devaluations, Inventory Shortages Plunge Shoprite Profit by 14.3%
Shoprite Holdings, a South African supermarket chain, posted a 14.3 percent decline in trading profit for the year ended June 30.
The company attributed the decline to inventory shortages at home in South Africa and currency devaluations across its operating nations in Africa.
Trade profit declined by 14.3 percent to 6.9 billion rand, while basic headline earnings per share (HEPS) for the same year fell by 19.6 per cent from 971.4 cents to 780.8 cents. The number was worse than the 15.5 percent decline predicted by analysts.
According to the company, broad currency devaluations and forex shortages across key markets in Africa weighed on the overall performance.
Economic uncertainty in countries like Angola, Shoprite biggest market outside South Africa, made it almost impossible to remain profitable.
Pieter Engelbrecht, the Chief Executive Officer, Shoprite, said the new system boosted in-stock levels sales in South Africa by 74.9 percent. Sales rose by 4.9 percent in South Africa.
“Notwithstanding the much improved recent performance in our core Supermarkets South Africa division, it was a testing year,” Engelbrecht said.