By Penelope Mashego for Fin24
Game owner Massmart has warned of major loss for the year, following the 2021 July unrest and insurance payout timing differences.
In a trading update on Friday the company, which also owns the Makro and Builders brands, said it expected a loss of just over R2.1 billion for the year ended 26 December 2021.
Massmart was one of many businesses impacted by the looting and unrest that took place in KwaZulu-Natal and Gauteng in July 2021, resulting in a R2.4 billion stock replacement and property repair cost for the group.
Massmart lost two of its Makro stores, while 41 of its outlets were significantly damaged.
In December, the group received an initial R435 million insurance payout from the South African Special Risks Insurance Association (Sasria). It will also receive a final R565 million payout from Sasria, this year.
“As previously reported, earnings and headline earnings has been negatively impacted by the asset losses and loss of trading income suffered as result of the looting, coupled with the timing differences relating to the recognition of business interruption insurance recoveries,” said Massmart.
The retailer added that it anticipates its headline earnings per share to widen between 13% and 23%.
Massmart is due to release its annual results next month.