South African retailer Woolworths posted a 40% rise in first-half profit, bolstered partly by foreign-exchange gains as consumers battling job losses and high debt levels rein in spending.
The food and clothing retailer said on Thursday headline earnings per share rose to 85,4 cents in the six months to end December, in line with its forecast range of a 35% to 45% increase.
Woolworths, which has been losing market share as its upmarket shoppers switched to cheaper rivals, said the results were boosted by favourable swings in the exchange rate.
Adjusted headline EPS — which excludes a post-tax foreign-exchange gain of R41,6-million and a R75-million secondary tax on companies (STC) charge on 2008’s special dividend — increased 13,8% to 80,1 cents.
The company reported a 9,3% rise in sales to R11,5-billion. The South African group has no connection to the British retailer of the same name that closed its doors last year.
South African retailers have been struggling as consumers reduced spending to cope with high debt levels and job losses but shoppers are gradually opening their purses again thanks to lower interest rates and a recovering economy.
Retail sales fell by a less-than-expected 3,7% year-on-year in December, data showed on Wednesday, showing still weak consumer demand but signs the sector may be on the mend. — Reuters