Wednesday, August 10, 2022

Makro owner Massmart’s annual loss deepens to R2.2 billion

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The July unrest cost Massmart R2.7 billion

The past year has been costly for retailer Massmart, following a combined R4.5 billion impact due to the July unrest, and Covid-19 related liquor sales bans.

The group, which released its results for the year ended 26 December 2021, saw its loss grow by 25.7% to R2.2 billion, from R1.8 billion in 2020.

Massmart, whose portfolio also includes the Game brand, said it lost about 110 days of trade due to the liquor sales bans in 2021, resulting in a R1.8 billion impact.

With regards to the unrest that took place in KwaZulu-Natal and Gauteng in 2021, Massmart said 43 of its stores and two distribution centres were affected. Of that number, nine stores and both distribution centres are still closed. The unrest has resulted in the group writing off inventory and impairing assets to the value of R1.4 billion.

Massmart’s total sales for the year from continuing operations increased by 0.1% to R77.6 billion.

The group did not declare a dividend due to headline loss of 980.2 cents, as well as the ongoing unrest and Covid-19 impact.

“While we remain uncertain of the future in terms of potential Covid-19 trading restrictions and global and local supply chain challenges on our business, we are confident in our ability to successfully navigate through these challenges and serve our customers,” said Massmart.

The retailer said it is working on re-opening the remaining stores affected by the unrest and expects its cost saving initiatives to continue.

Despite its performance, the group said it is well positioned to pursue growth.

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