South African retailer Woolworths has reported a nearly 15% rise in annual profit as promotional sales, online growth and lower debt offset the impact of power cuts in the country and a cost-of-living crisis in its operating regions.
The food and fashion retailer posted headline earnings per share of 423.4 South African cents from continuing operations in the 12-month period ended June 25, from 368.7 cents seen a year earlier.
The company sold an Australian clothing division, David Jones, earlier this year, therefore profit from continuing operations are a more precise measure for the year.
The group's food business saw a 8.5% increase for the full year, or 6.3% on a comparable store basis. Growth in its food business accelerated to 9.4% in the second half of the year, 'driven by both increased footfall and improved availability, notwithstanding the considerable disruption caused by higher levels of load shedding', the group added.
Power Outages
The company has seen increased food wastage as a result of South Africa's worst rolling blackouts on record, it said in a statement in July.
Woolworths has had to increase its diesel spend on back-up generators to keep produce fresh and operations afloat across the South African supply chain.
Read More: South African Food Producers Warn Of Higher Prices As Infrastructure Crumbles
Inflation Impact
Adding to the risks, sticky inflation across both its South African and Australian operations prompted consumers to tighten their purse strings.
'The trading environment is likely to remain challenging across both geographies for the foreseeable future, as elevated inflation and interest rates pose a headwind to the outlook for disposable income and discretionary spend,' the company said in a statement.
Additional reporting by ESM
