News update: Covid-19 hits Massmart hard and Harmony Gold profits surge

 News update: Covid-19 hits Massmart hard and Harmony Gold profits surge

News update.

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Covid-19 hits Massmart hard

During the 52 weeks ended on 27 December, Massmart reported a loss of R6 billion in sales, due to lockdown regulations prohibiting the sale of alcohol. The group said on Friday that the performance had forced it to carefully review its strategy and to divest in an additional 14 Masscash Cash and Carry stores. The owner of Game, Makro, and Builders Warehouse said estimated losses as a result of Covid-19 amounted to at least R6bn, including extended restrictions on normal trading of alcohol when compared to 2019. “Some of the impact of lost sales were offset by rent relief received from our landlords, and benefits received from government through the Temporary Employment Relief Scheme relief provided,” said Massmart.

The group’s total sales were R86.6bn, 7.7 percent lower than a year ago as Covid-19 restrictions weighed heavily on foot traffic.

The retail sector was negatively affected by a weak Black Friday, with BankServAfrica reporting that store card transactions had declined 32.6 percent in volume and 51.5 percent in value. The group incurred total retrenchment costs of approximately R132 million for the full year following the closure of Dion Wired, and the 11 Masscash stores, the shake-up of Game’s operating model, and the reorganisation of certain support functions into centralised centres of excellence.

Last year Massmart closed its entire Dion Wired business, 11 Masscash stores, and shook up the business model at Game stores by shelving fresh produce and introducing basic apparel.

Harmony Gold profits surge

Harmony Gold Mining Company,  expects to post a 339 percent surge in profits during the six months to the end of December as the strong bullion price rally and the bargain acquisition of AngloGold Ashanti’s remaining South African assets pay off. Harmony said on Friday that its net profit would climb between R5.7 billion and R5.9bn – up between 325 and 339 percent from a year earlier, also buoyed by higher production and foreign exchange translation gains.

Chris Louw

https://sashares.co.za/

Featured Financial Writer for SA Shares - Read more about Chris's Bio -

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