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Woolworths Sees Profit Rising as Food Sales Increase

Woolworths, South Africa’s biggest retailer by market value, said first-half earnings probably climbed as much as 35 per cent, as sales increased in clothes, food and Australian chain David Jones.

Earnings excluding one-time items for the six months through 27 December probably increased 25 per cent to 35 per cent, to as much as 2.62 rand a share, the Cape Town-based company said in a statement Thursday. Earnings per share will probably be 30 per cent to 40 per cent higher than the 1.84 rand reported a year earlier, it said.

South African retailers are showing positive momentum as a more reliable power supply and falling fuel prices help consumers. Shoprite Holdings posted an 8.8 per cent increase in first-half revenue, Africa’s largest grocer reported on Tuesday, while food and goods wholesaler Massmart Holdings said on Thursday its total sales rose 8.4 per cent in the year ended December.

Woolworths’ first-half sales rose 17 per cent, or 12 per cent excluding the contribution of David Jones. A year earlier, revenue was 55 per cent higher, while sales growth excluding David Jones was comparable at 13 per cent. The earnings for the year-earlier period included transaction and other related costs, as well as unrealized foreign-exchange gains.

Woolworths shares have fallen 6.6 per cent this year in Johannesburg, compared with a 4.5 per cent decrease in the FTSE/JSE Africa All Share Index. The FTSE/JSE Africa General Retailers Index of 11 companies has declined 2.9 per cent.

News by Bloomberg, edited by ESM. To subscribe to ESM: The European Supermarket Magazine, click here.

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