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Steinhoff First-Half Profit Rises on Logistics, Automotive Units

March 1 (Bloomberg) -- Steinhoff International Holdings Ltd., Africa’s largest furniture maker, said fiscal first-half profit rose 5.6 percent as its logistics and automotive units performed better.

Net income increased to 1.67 billion rand ($240 million) in the six months through December from 1.58 billion rand a year earlier, the Johannesburg-based company said in a statement today.

Sales fell 3.4 percent to 24 billion rand, hurt by the South African currency’s 15 percent gain against the euro for the period under review, the statement said. More than half of revenue is reported in currencies other than the rand.

Steinhoff’s operating margin widened to 10.4 percent in the period from 10.1 percent a year earlier, as the company improved purchasing practices and hedging protected it against rising raw-material costs.

The logistics division, which provides services including warehouse and distribution-network management, posted a 12 percent increase in sales. The automotive division, which sells and rents cars, had a 14 percent revenue gain.

In January the company agreed to buy PPR SA’s Conforama chain for 1.21 billion euros ($1.67 billion) to strengthen its position in Europe. Conforama operates 236 furniture stores in Europe, including 186 in France.

The Conforama deal will probably be completed "in the coming weeks,’’ Steinhoff said today. “The proposed acquisition represents a great advance towards the completion of our mass-market retail footprint in continental Europe, and in addition will accelerate growth within the existing supply chain."

To contact the reporter on this story: Nicky Smith in Johannesburg at nsmith38@bloomberg.net

To contact the editor responsible for this story: Vidya Root at vroot@bloomberg.net

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