Chamwe Kaira
Retail conditions in Namibia are among the factors affecting profitability at regional supermarket group Choppies Enterprises Limited, which expects lower earnings for the six months ended 31 December 2025.
Choppies Enterprises Limited expects its profit after tax from continuing operations to fall by between 28% and 38% for the six months ended 31 December 2025.
The Botswana-based supermarket group said profit after tax from total operations is forecast to decline by between 4% and 14% compared with the same period last year.
In a trading statement to the Botswana Stock Exchange and JSE Limited, the company said several regional economic factors have affected earnings, including retail conditions in Namibia.
The retailer said government-subsidised commodities in Namibia have placed pressure on retail margins.
The company also cited challenges in other markets. These include reduced consumer spending linked to a slowdown in Botswana’s diamond sector, currency devaluation, government austerity measures and rising inflationary costs.
Expansion costs from newly opened stores that are not yet fully established also affected profits. Promotional competition in tight markets also added pressure.
In Zambia, the appreciation of the kwacha led to lower prices on key food products, which affected revenue.
Despite the expected drop in profits, the company said revenue growth remains strong and demand for food retail products remains stable.
Cash flow indicators show improved liquidity. Free cash flow is projected to increase to about Botswana pula (BWP) 116 million to BWP121 million.
Net cash from operating activities is expected to grow to between BWP310 million and BWP340 million. One Botswana pula is equal to about N$1.21.
Profit after tax from total operations is expected to reach between BWP73 million and BWP82 million, compared to about BWP85 million in the previous year.
Continuing operations are expected to generate between BWP71 million and BWP83 million, compared with about BWP115 million during the same period last year.
The company said it still plans to declare a dividend, although it will be lower than last year and aligned to a 25% payout ratio under its dividend policy.
During the period, Choppies repaid a consortium debt of about BWP82 million using internal cash and short-term borrowing.
The retailer also added 626 employees across its operations and implemented living wage increases in Botswana.
Choppies said it will continue focusing on strengthening profitability in its main markets of Botswana, Namibia and Zambia.
It is also working to improve distribution and inventory systems, control costs and introduce a new enterprise resource planning system.
The company expects to release its full condensed financial results for the period on or about 27 March 2026.
