Branded automotive, industrial and electronic consumable products importer and distributor Hudaco’s financial results for the six months ended May 31, 2020, have been severely impacted by measures to curb the spread of Covid-19.

The company announced this in a statement on June 23, despite having reported recently that despite business disruptions as a result of the Covid-19 pandemic, its business “remains in a sound financial position, with payments still being made to its creditors on negotiated terms”.

Most of the company’s businesses were closed for five weeks in March and April owing to South Africa’s lockdown in response to the pandemic, and in May, trading was restricted, the effects of which Hudaco says “are amplified” when assessed in the half-year period.

As a result of the Covid-19-related effects on its business, Hudaco’s earnings, headline earnings and comparable earnings a share for the six months ending May 31, 2020, will be over 20% lower than for the equivalent period in the previous year.

Headline earnings per share (HEPS) for the six months are expected to be between 190c and 200c, which is between 64% and 62% lower than the HEPS of 533c reported for the same period in 2019.

Comparable earnings per share (EPS) for the six months are expected to be between 64c and 74c, which is between 88% and 85% lower than the 520c reported for the same period in 2019.

For the half-year ended May 31, 2019, the company reported basic EPS of 533c, which is between 246% and 231% higher than the expected basic EPS of between 778c and 698c for the interim period under review.

Hudaco notes that Covid-19 and its impact on the prevailing economic climate have resulted, among others, in a major decrease in turnover during the lockdown period, increased expected losses, a decrease in the expected net realisable values of certain inventory lines and the impairment of goodwill at certain businesses.

Other factors that have negatively impacted on the group's results include load-shedding (up to Stage 6) in December 2019, and the first time adoption of the International Financial Reporting Standards with regard to leases.

The group’s results for the six months are scheduled to be released on June 26.