IMPERIAL:  5,554   -50 (-0.89%)  20/06/2019 00:00

South Africa's slow growth hurts Imperial Logistics' outlook

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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 costs.

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 said.

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 0756 GMT. ($1 = 13.9425 rand) (Reporting by Nqobile Dludla; Editing by Susan Fenton)

2019-02-28 10:45:58

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