Pick n Pay sales rise but dividend suffers

Pick n Pay missed dividend estimates as South Africa’s third-largest grocer incurred extra costs to keep the lights on at its stores amid nationwide power outages.

A dividend of R1.85 a share was declared for the 12 months ended Feb. 26, the Cape Town-based company said in a statement on Thursday.

That compared with a R1.92 median estimate of eight analysts surveyed by Bloomberg. Sales rose 8.9% to R106.6 billion.

Last year, the grocer announced a three-year target of R3 billion in savings, even as it faces inflationary pressures and the increased cost of adding standby generators, rooftop solar panels and refrigerated trailer trucks.

South African companies ranging from miners to food producers are grappling with the worst nationwide power cuts on record.

Pick n Pay’s stock has dropped 28% this year while the benchmark index has climbed. Shoprite, the country’s largest grocer, has declined 3.7%.