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Monday, 23rd September 2019
6:45:36am

South Africa's Shoprite posts surprise drop in annual profit

South Africa’s Shoprite reported a surprise 3.8 percent fall in annual earnings on Tuesday, citing a currency devaluation in Angola and lacklustre trading in other markets abroad.

Africa’s biggest grocery store chain reported diluted headline earnings per share (EPS) of 968.7 cents in the year ended July versus a 1,090 cents estimate in a poll of 10 analysts by Thomson Reuters’ I/B/E/S.

Analysts had expected an increase of 8.2 percent.

Headline EPS, the most widely watched profit gauge in South Africa, strips out certain one-off items.

Sales of the Cape Town-based company rose 3.1 percent to 145.3 billion rand ($9.9 billion).

Shoprite, which trades in 14 countries in the rest of Africa and Indian Ocean islands, said its local division reported turnover growth of 5.7 percent, while its non-South Africa operations recorded a decline in sales of 7 percent.

The company said its Angolan business was hit by a chronic shortage of foreign currency and a devaluation, adding that the Angolan Kwanza had lost 50 percent of its value against the U.S. dollar since December 2017.

It said other markets outside South Africa “continued to experience lacklustre trading conditions and foreign exchange fluctuations.”

-Reuters

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