Super Group warns of first revenue drop in 11 years partly due to load-shedding
Political uncertainty in Europe, as well as SA’s weak economy, means the transport and logistics services group expects profits to fall
Transport and logistics services company Super Group said on Monday it was on track to report its first revenue drop in 11 years. This is as it battles with political uncertainty in Europe and load-shedding in SA.
A decline in new-vehicle manufacturing in Germany and a drop in activity for its commodity-facing business in SA all weighed on the group in its six months to end-December, when operating profit fell about 8.7% from R1.3bn in the prior comparative period.
Headline earnings per share are expected to fall as much as 13.7% to 150c, the group said in a trading update.
SA's economic performance had deteriorated, even as the group, faced political uncertainty in the UK and Europe, although it reported its Supply Chain Africa's consumer and industrial businesses performed well despite muted consumer demand and labour unrest in the retail sector.
Supply Chain Africa's commodity-facing businesses in SA experienced a sharp decline in activity levels due to electricity generation and transmission problems, as well as adverse weather conditions, particularly during November and December 2019, the statement read.
The group is expecting revenue to fall about 3% from the prior comparative period's R19.4bn.
Supply Chain Europe performed poorly as German motor vehicle manufacturing levels are at a 23-year low, Super Group said, saying that business was going through an extensive process of cost reduction and operational rationalisation.
At 12.30pm Super Group's share price had fallen 0.64% to R25, having fallen about 42% over the past two years.