South Africa’s SPAR Group on Thursday reported a 13.4% drop in half-year earnings, hit by losses at its restructuring Polish business, and flagged a conservative dividend due to market uncertainty amid the coronavirus crisis.
The grocery chain and wholesaler, which also sells building materials and medicines, said normalised headline earnings per share (Heps) dropped to 452.7 cents, for the six months ended March 31, from 522.5 cents last year.
SPAR declared an interim dividend of 200 cents per share, 29.6% lower than the previous year.
“Owing to the uncertainty, the board has declared a conservative interim dividend and will consider the annual dividend at year-end when there is more clarity,” the company said in a statement.
The grocery chain, which has been expanding in Europe amid a weak economy at home but ran into troubles in newer markets such as Ireland and Switzerland, completed the acquisition of a controlling stake in Polish deli and supermarket chain Piotr i Pawel group in October.
SPAR said the Polish business is currently subject to a legally supervised debt restructuring process similar to South African business rescue, a form of bankruptcy protection.
“The lockdown measures suspended all court activity and has prevented the settlement. This has delayed the resumption of normal trading operations, with adverse effects on both retail and wholesale performances reported during and after the reporting date,” the South African retailer said.
Group sales rose 10.1% to R59.7 billion, while operating profit came in 3.4% lower due to tepid performance at the Polish business.