South Africa's slow growth hurts Imperial Logistics' outlook
JOHANNESBURG, Feb 28 (Reuters) - South Africa's Imperial
Logistics Ltd said on Thursday that it expects its
full-year operating profit to be lower than last year due to
rising costs and slow economic growth in its home market.
Its shares plunged more than 10 percent in early trade as
investors focused on the weak outlook, which overshadowed a 24
percent rise in earnings in its first half year.
Imperial, which spun-off and listed its automotive arm Motus
in November, is battling reduced volumes and lower
consumer demand mainly in the consumer packaged goods and
healthcare businesses in South Africa.
"Logistics South Africa to deliver (second half) performance
below that of the prior period due to lower consumer demand
impacting the (consumer goods) business, the low-growth economic
environment in South Africa and costs associated with the
business rationalisation and restructure," the company said in
its half-year results statement.
The transport company, which also has operations in Europe,
reported continuing headline earnings per share (HEPS) of 300
cents for the six months ended Dec. 31, up from 241 cents a year
earlier, due to lower debt levels resulting in lower interest
HEPS is the most widely watched profit gauge in South Africa
which strips out certain one-off items.
In the UK, Brexit has increased economic uncertainty, with
the potential risk of depressing consumer demand, the company
Operating profit from continuing operations were flat in the
first half at 1.3 billion rand ($93 million).
Imperial said HEPS for the year ending June 30 is forecast
to be in line with the prior year.
Shares in Imperial were down 10.3 percent at 64.24 rand by
($1 = 13.9425 rand)
(Reporting by Nqobile Dludla; Editing by Susan Fenton)
© 2019 Thomson Reuters. All rights reserved. Reuters content is the intellectual property of Thomson Reuters or its third party content providers. Any copying, republication or redistribution of Reuters content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters. Thomson Reuters shall not be liable for any errors or delays in content, or for any actions taken in reliance thereon. "Reuters" and the Reuters Logo are trademarks of Thomson Reuters and its affiliated companies.