South Africa's Massmart annual net loss widens on Covid-19 hit

[JOHANNESBURG] , March 8 (Reuters) - South African retailer Massmart reported a larger full-year net loss of 1.753 billion rand (S$153. 48 million) on Monday as coronavirus-led restrictions hammered sales and costs rose.

Government-imposed curbs meant Massmart, majority owned by Walmart Inc, was not allowed to sell liquor, tobacco, building materials and non-food products such as televisions from late March last year to May. Those items account for about 56 per cent of its sales.

The Game and Makro department chain owner estimated that it lost out on sales worth 6.1 billion rand in 2020 due to the restrictions.

As a result, group sales fell by 7.7 per cent to 86.5 billion rand.

Sales in its South African stores fell by 7.9 per cent, while sales in stores in the rest of Africa decreased by 5.4 per cent in rand terms and by 6.9 per cent in constant currencies.

Massmart said its net loss for the 52 weeks ended Dec 27 widened by 35.3 per cent from a restated net loss of 1.269 billion rand a year earlier.

However, its headline loss slightly narrowed to 924 million rand from a loss of 1.2 billion rand in 2019.

The results also took a hit from retrenchment costs of about 132 million rand related to store closures and moves to centralise certain functions as part of a turnaround plan.

The company said on Monday it would review its stores outside the Southern African Development Community region in the second quarter of 2021 as part of the turnaround plan.

To this end, Massmart has appointed Barclays to facilitate the disposal of its food retail and wholesale outlets Cambridge Food, Rhino and massfresh, which comprises of Fruitspot and a meat processing facility.

REUTERS