South African grocery retailer Massmart has posted a drop in first-half profits on the back of costs from the sale of a majority stake in the business to Wal-Mart Stores.

Massmart today (25 August) reported a 25.8% drop in net income to ZAR838.7m (US$116.1m) for the first six months of the year. 

Go deeper with GlobalData

Premium Insights

The gold standard of business intelligence.

Find out more

Headline earnings per share for the period stood at ZAR4.33 compared to ZAR5.67 last year.

Operating profit fell 13.7% to ZAR1.61bn. Wal-Mart’s bid to acquire a 51% stake in Massmart was approved by South Africa’s competition watchdog in May, subject to conditions, including an order that the two companies pledge ZAR100m for a fund to support local suppliers.

The ruling remains subject to a court appeal by the South African government, which wants Wal-Mart and Massmart to improve the supplier fund.

See Also:

Excluding costs from the Wal-Mart deal, Massmart said its half-year operating profit increased 10.3% to ZAR2.06bn.

How well do you really know your competitors?

Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.

Company Profile – free sample

Thank you!

Your download email will arrive shortly

Not ready to buy yet? Download a free sample

We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form

By GlobalData
Visit our Privacy Policy for more information about our services, how we may use, process and share your personal data, including information of your rights in respect of your personal data and how you can unsubscribe from future marketing communications. Our services are intended for corporate subscribers and you warrant that the email address submitted is your corporate email address.

The company also posted an 11.6% increase in sales to ZAR52.95bn.

Massmart CEO Grant Pattison said he expected the benefits of the relationship with Wal-Mart would only show through in the group’s 2013 financials and beyond.

“The process of integration with Walmart has just begun, but there is certainly plenty of medium- and long-term opportunity on the African continent to save people money so they can live better,” Pattison said.

“Despite the difficult and uncertain socio-political and economic environments, both locally and globally, we believe we have the plans in place to deliver another solid performance in the year to June 2012.”