South African pharmacy chain Dis-Chem Pharmacies reported a 17.2% decline in half-year earnings on Friday, however it anticipates a stronger second half, supported by progress in cost control measures.
The group's headline earnings per share, a key metric of profit for South African companies, fell to 58.2 cents in the six months ended Aug.31 from 70.3 cents in the same period a year earlier.
"The constrained economic environment, higher interest rates and costs associated with load-shedding has resulted in a weaker performance by the group," the company said.
In the current financial year, Dis-Chem has also been impacted by the base effects of the prior year's performance, when the first-half results were aided by acquisitions and COVID-19 vaccine administration and testing services.
Dis-Chem reported a 9.4% rise in revenue to 17.9 billion rand ($975.31 million) with retail revenue up 8.1% to 15.6 billion rand and comparable pharmacy store revenue up by 5.9%.
Wholesale revenue grew by 13.5%.
Dis-Chem, which competes with Clicks Group, said there will be a particular focus on the management of staff costs in its cost control measures.
"This progress in managing the group's largest cost line represents a significant step in securing positive operating leverage translating into operational profit improvements in the second half of financial year 2024 and over time," the company said.
($1 = 18.3531 rand) (Reporting by Nqobile Dludla; editing by Shri Navaratnam and Jason Neely)