Devaluation of Angola Kwanza negatively impacted Shoprite earnings

27 Feb 2019 11:20am
WINDHOEK, 27 FEB (NAMPA) – The devaluation of the Angolan currency (Angola kwanza) led to a decrease in Shoprite Holdings Limited’s headline earnings per share (HEPS) for the six months ended 30 December 2018.
Shoprite announced on the Namibia Stock Exchange (NSX) on Tuesday, that the HEPS was 398.5 cents per share when compared to 525.2 cents per share during the same comparative period in 2017.
It said the dramatic devaluation in the Angola Kwanza by 85,1 per cent against the US.dollar in January 2018 contributed to the decline along with environmental issues which also affected demand from price-sensitive customers.
“The Angolan economy remains in recession, adversely affecting consumption expenditure in the country, with mostly our price sensitive customers being unable to maintain spending levels,” the group said.
More so, environmental issues include the ‘Listeriosis Crisis’ affecting processed meat sales and South Africa’s first valued added tax hike in 25 years, as well as the new sugar tax.
The organisation further said that the financial information on which its trading statement was based was not reported on by the company’s auditors and that its annual results are expected to be published by 20 August 2019.
The decline in HEPS was amongst others attributed to underperformance of non-South African operations, where supermarkets in the non-South African segment reported a trading loss of N.dollars 61.8 million compared to a trading profit of N.dollars 552,7 million during the same period in 2017.
The six months were affected by economic conditions that left core customers under significant financial pressure, where currency devaluations severely impacted the performance of non-South African operations, the group added.
In its economic outlook, the group said the performance of non-SA supermarkets is dependent on foreign currency availability in Angola and Nigeria together with stable currencies and that the Angola kwanza has shown more stability since the start of January 2019.
Shoprite is a supermarket retailer on the African continent, with supermarkets, liquor retailing and furniture franchises on the continent, and is listed on the Namibia Stock Exchange.