Foreign exchange losses take their toll on Imperial
Transport and logistics group says falling commodity demand, low oil prices and the consequent effect on consumption affected growth in its African regions
Transport and logistics group Imperial on Tuesday reported a 15% drop in first-half headline earnings per share (HEPS) to R6.82 due to foreign exchange losses and higher finance costs. The stronger rand resulted in foreign exchange hedging losses, affecting its home market, which accounted for the bulk of the revenue and profits generated in the six months to December. Higher finance costs resulted from the Palletways acquisition and delays in the receipt of proceeds from assets and businesses held for sale. Group revenue was up 2% to R61.25bn but net profit dropped 24% to R1.35bn. The interim dividend dropped 14% to R3.20c per share. Imperial said falling commodity demand, low oil prices and the consequent effect on currencies and private consumption had also affected growth rate in the African regions, which constituted 16% of operating profit. "Imperial has always been a exceptionally well run company but also one whose earnings are prone to shocks owing to exogenous variables," ...
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