Massmart interim results June 2019

Johannesburg, Gauteng, SA (August 29, 2019) – Revenue for the interim period grew to R43.9 billion (R41.7 billion) whilst gross profit rose to R8.4 billion (R8.1 billion). Operating loss before interest came to R129.8 million (profit of R571.1 million). Loss for the period of R585.8 million (profit of R190 million). Furthermore, headline loss per share was 251.8cps (earnings of 94.7cps).
       Dividend: Massmart’s dividend policy is to declare and pay an interim and final dividend representing a 2.0 times dividend cover unless circumstances dictate otherwise. As a result of the headline loss reported during this period, no interim dividend has been declared.
         Company outlook and trading statement for the year ended December 2019: For the 33 weeks to 18 August 2019, total sales amounted to R55.8 billion, representing an increase of 5.0% over the prior period. Comparable stores' sales increased by 3.2%. Product inflation is estimated at 2.6%.
       It is difficult to envisage the South African consumer economy improving in the near-term and negative risks seem heightened in the international geopolitical and economic situation. Massmart's profitability has always been heavily skewed towards the second half of the financial year and particularly the fourth quarter, which includes Black Friday and the Festive season, which makes near-term financial guidance difficult.
       Assuming no further deterioration in the South African consumer economy for the remainder of 2019, Massmart expects that basic earnings per share for the year to December 2019 may be at least 50% below last year's basic earnings per share of 410.6 cents per share on a comparable basis (excluding the impact of IFRS 16) and may be at least 100% below last year's basic earnings per share of 410.6 cents per share (including the impact of IFRS 16). On the same basis, Massmart expects that headline earnings per share for the year to December 2019 may be at least 50% below last year's headline earnings per share of 416.5 cents per share on a comparable basis (excluding the impact of IFRS 16) and may be at least 100% below last year's headline earnings per share of 416.5 cents per share on a reported basis (including the impact of IFRS 16). A further announcement will be released once there is a reasonable degree of certainty on results in due course.