Imperial Holdings Ltd., owner of South Africa’s largest car-dealer network, said full-year profit will decline as a weaker rand increases the cost of vehicle imports amid sluggish economic growth in its main markets. Headline earnings per share, which excludes one-time items, fell 9 percent to 7.59 rand ($0.65) per share in the six months through December, the Johannesburg-based company said in a statement on Tuesday. Imperial cut its half-year dividend to 3.50 rand a share from four rand. Factors hurting the company are “the weakening of the rand against the currencies in which we import new vehicles; the poor state of the South African economy,” Imperial said. Others include “a much slower than expected recovery of the German economy,” where it also has operations. The rand weakened 9.3 percent against the dollar last year, following a 19 percent decline in 2013. The weaker currency has raised costs for companies in Africa’s second-biggest economy, which the government estimates grew at its slowest pace in five years in 2014. A slower than expected recovery in Germany caused Imperial to reduce its forecast for the international logistics unit, the company said. Imperial shares have gained 9.5 percent this year to 202.50 rand, valuing the company at 42 billion rand. That compares with a 7.2 percent gain on the FTSE/JSE Africa All-Share Index. ©2015 Bloomberg News
