South African logistics company Imperial Holdings is accelerating its expansion into Africa as feeble demand and a weakening currency hit business at home. The company on Tuesday reported flat full-year profits, despite a loss of 558 million rand ($43 million) at its vehicle import and distribution division, sending its shares soaring.
"Over time, more of Imperial's business will come from outside of South Africa than from inside," Chief Executive Mark Lamberti told Reuters. Headline earnings per share (EPS) was unchanged at 1,624 cents, far better than the 1,537 cents estimate by Thomson Reuters StarMine SmartEstimate. Shares in Imperial rose 12.51 percent to 176.50 rand by 1339 GMT, limiting this year's losses to about 3 percent.
Imperial, which imports auto brands such as Kia and Mitsubishi, said buyers were highly price sensitive in South Africa and were trading down to smaller or second hand vehicles, resulting in fierce competition between dealers. The division accounts for about a quarter of Imperial's sales, but its 37 percent decline in profit weighed on overall company earnings. "Today, the import division is only 15 percent of our group operating profit, five years ago it was over 40 percent, so we are moving in the right direction," said Lamberti.
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