SOUTH AFRICA – Walmart’s South African subsidiary Massmart declared a final dividend of US$0.18, taking its total for its 2017 financial year to US$0.29, a 16% increase on the previous year’s US$0.25.
Massmart downplayed its revenue and profit growth in a depressed consumer environment, stressing its 2017 financial year had 53 weeks whereas its 2016 financial year had 52.
Total sales came to US$7.9 billion, which was 2.7% higher than 2016’s US$7.78 billion.
But excluding the extra week, sales growth was 1%, Massmart said in its results released on Thursday morning.
Net profit grew 13.6% to US$127.8 million and without the extra week, profit grew 1.4%.
“Whilst SA’s new political leadership and direction will, in the short to medium term, undoubtedly improve many economic factors, the structural, policy and public sector impediments remain long-term challenges,” CEO Guy Hayward said in the results statement.
“This is undoubtedly SA’s best shot in recent memory at reinvigorating our own social, economic and political progress and prowess, and restoring our place as a key actor on the African continent.
We are an excited and proud South African company.”
Walmart’s share price also plunged more than 10% on the New York Stock Exchange after it reported it was reaping disappointing returns from its heavy investment in e-commerce.
“During the year, investment spend was focused on new IT infrastructure, store openings and the refurbishment of existing stores.
As a result, the net book value of property, plant and equipment increased by 8.8% over the prior year,” Massmart said in its results.
“Total capital expenditure was US$153.6 million.
Expansionary expenditure was US$93.8 million and included the rebuild of the Jumbo Crown Mines store, the new Makro Riversands store, the Massfresh meat plant and investments in IT systems.”
Massmart described itself as Africa’s second-largest retail group, with 423 stores across 13 sub-Saharan countries. Shoprite is presumably the largest.
Its 42 stores outside SA produce 8.3% of the group’s sales.
Hayward said that its stores outside SA averaged four times higher sales that its South African competitors.