Johannesburg - Walmart's South African unit Massmart
reported a 9.9% fall in first-half profit on Thursday as
debt-laden consumers at its home market cut down on spending.
Massmart, which sells everything from groceries to
televisions, said headline earnings per share (EPS) before currency swings
totalled 181 cents in the six months to end-June compared with 201c
a year earlier.
Massmart, which generates nearly 10% of its
sales in several African countries outside South Africa, said favourable
currency swings added R134 to the bottom line, causing
headline EPS to increase by 52%.
Sales rose 8.9 % to R32.4bn and the company maintained its dividend payout at 146 cents per share.
After more than two years as an investor darling,
South African retailers are fast falling out favour due to concern that
high personal debt levels and reluctance among banks to lend more will
squeeze spending in the country.
"There's little on the macroeconomic horizon that
suggests any improvement," said Massmart, which is 51% owned by
Walmart. "We believe the remainder of the year will continue to see
sales under pressure."
South African retail sales grew by a
smaller-than-expected 1.9% in June, data from the government
statistics office showed last week.
Shares in Massmart are down about 20% so far
this year, lagging behind a 10% gain in Johannesburg's All-share
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