South Africa's Massmart reports drop in earnings

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South African retailer Massmart reported a 26.4 percent drop in half-year earnings on Thursday as foreign exchange losses and higher interest payments from property acquisitions hit profits.

Massmart, majority-owned by Wal-Mart Stores Inc, said diluted headline earnings per share fell to 122.4 cents in the six months ended June compared with 166.4 cents a year earlier.

The retailer has had to absorb part of the impact of a declining South African currency as it has limited scope to pass price increases on to debt-laden consumers in Africa’s most advanced economy already grappling with rising energy and transport costs.

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Headline EPS is the main profit measure in South Africa and strips out certain one-off items.

Sales rose 9.1 percent to 38.9 billion rand ($2.97 billion)for the 26 weeks ended June 28.

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