South African retailer Massmart Holdings has flagged a wider annual loss for its financial year to 26 December 2021, impacted by damage to its stores and lower trading income due to looting during the country's civil unrest last year.
The retailer, majority-owned by Walmart Inc, said it expects its 2021 headline loss, the main profit measure in South Africa, from total operations to come in between R 1.478 billion (€86.8 million) and R 1.571 billion (€92.3 million).
That is at least 60% to 70% wider than the loss of R 924 million (€54.3 million) reported in 2020.
Excluding food businesses held for sale such as Cambridge and Rhino stores, the loss is seen widening to between R 938 million (€55.1 million) and R 1 billion (€58.7 million).
Impact From Civil Unrest
The retailer said in December it took a significant inventory write-off because of the civil unrest that erupted after President Jacob Zuma was forced to turn himself in to be jailed for contempt of court in July.
The looting directly impacted 43 of its stores, resulting in lost trading profit of around R 450 million and an accounting loss of around R 650 million after insurance proceeds.
'As previously reported, earnings and headline earnings has been negatively impacted by the asset losses and loss of trading income suffered as result of the looting, coupled with the timing differences relating to the recognition of business interruption insurance recoveries,' the group said in a statement.
Massmart operates 411 stores in 13 sub-Saharan countries, in the general merchandise, liquor, home improvement and wholesale food markets.
Its preliminary annual results will be released to the market on 7 March 2022.
News by Reuters, edited by ESM – your source for the latest Retail news. Click subscribe to sign up to ESM: European Supermarket Magazine.