Johannesburg - South African retailer Massmart Holdings
[JSE:MSM] reported a 19% rise in first-half profit on Wednesday, helped almost
entirely by favourable currency swings as higher costs and discounts weighed.
Massmart, 51% owned by US retail giant Walmart, said diluted
headline earnings per share totalled 407.3 cents in the six months to
end-December compared with 343c a year earlier.
Headline earnings per share were boosted by a R82.4m foreign
exchange gain, without which they would have shown a slight 2.9% rise.
While consumer spending is slowly recovering thanks to low
interest rates and above-inflation wage increases in South Africa, Massmart has
yet to see the benefits flow through to profit as it spends on an aggressive
price and expansion strategy to double market share in food sales.
Massmart said sales increased 15% to R31.4bn helped partly
higher higher food inflation.
South African retail sales jumped 8.7% year-on-year in
December, beating the 6.5% increase economists had expected.
Both Massmart and parent Walmart are awaiting judgments on
appeals from both the South African and the Namibian governments, which are
seeking to block or attach more conditions to the $2.4bn deal.
Shoprite Holdings [JSE:SHP], a domestic merchant seen likely
to lose the most from discounter Walmart's entry into the country, boosted
profit by 18% on Tuesday.