Massmart Holdings Ltd., the South African food and goods wholesaler owned by Wal-Mart Stores Inc., fell the most in more than 14 years after saying first-half earnings dropped.
Profit excluding one-time items fell as much as 30 percent, the Johannesburg-based company said in a statement on Wednesday, without giving further details. Earnings by this measure declined 26 percent a year earlier.
The shares fell 11 percent to 113.87 rand as of 10:18 a.m. in Johannesburg, the biggest decline since Feb. 28, 2001.
“Massmart is still dealing with costs incurred from being part of Wal-Mart,” Alec Abraham, an equities analyst at Sasfin Securities in Johannesburg, said by phone. “This may be the tail end of these costs, but is at a time when the South African economic environment isn’t supporting consumers and Massmart’s business model.”
South African retailers are struggling as high unemployment, power cuts and rising fuel prices force shoppers to cut down on major purchases. South African consumer confidence dropped to a 14-year low in the second quarter of this year.
The company is scheduled to publish first-half earnings on Aug. 27.