Power cuts break equipment at major South African retailer

Italtile said unreliable energy transmission and distribution infrastructure in South Africa has resulted in numerous power interruptions, causing damage to the retailer’s equipment and reduced productivity and yield.

Italtile also slammed South Africa’s tough operating environment, saying above-inflation increases in input costs, such as electricity and taxes, are exacerbating the pressure from intense competition in its industry.

This intense competition, the company said, stems from independent retailers and informal traders who sell products at predatory prices, leaving Italtile unable to compete on a level playing field.

As a result, Italtile’s financial health has been in decline for years, with the company reporting a 14% decrease in profit in its latest results.

Italtile released these results for the first half of its 2026 financial year on Monday, 2 March, covering the six months through December 2025.

These results revealed a 2% decrease in revenue to R4.7 billion, and a 14% decline in profit to R748 million.

Italtile recorded earnings per share of 60.9 cents, a 14% decrease from the first half of its 2025 financial year.

The company’s net asset value per share declined by 6% to 637.4 cents.

Italtile attributed these results largely to South Africa’s tough macro and operating environment.

“The challenging global and South African macro-economic environment, impacted by uncertainty and geopolitical conflict, persisted during the six-month reporting period,” it said.

This environment, it said, was characterised by intense competition, weak demand and an imbalance between excess supply and weak demand.

The company cited the dumping of cheaper products, exacerbated by the strengthening rand, as the main reason for this.

“The intense competition in the tile manufacturing and retail sectors remains as excess capacity and production in neighbouring countries continues to result in overstocking, depressed pricing and dumping in South Africa,” it said. 

“Above-inflation increases in input costs, such as gas, electricity and rates, and taxes, and our inability to pass these on to customers, resulted in further margin pressure.”

“Independent retailers continue to open stores, and the informal traders, supplied by the Southern African Development Community competitors at predatory pricing, continue to offer cheaper products.”

Italtile declared an interim dividend of 24 cents per share, down 14% from the previous year’s half-year dividend.