However, this was not due to poor sales, which climbed 8% to R4,8bn, but the result of financing costs of R542 million and a R620 million amortisation cost, related to its acquisition by Bain Capital last year.
Despite difficult trading conditions, operating profit grew 7% to R789 million compared to the corresponding period last year.
Comparable store sales were the same as last year, with average selling prices rising 1%.
Edcon traded from 1154 stores by 30 June, up from 959 stores last year, as average retail trading space rose 12%.
Excluding the Discom chain it acquired in September, average retail space rose 6%.
The group said rising interest rates and the National Credit Act dampened credit sales, which accounted for only 53% of sales, compared with 58% in the corresponding quarter last year.
The credit and financial services division reported a net profit of R111 million; up from R44m last year.
Following an aggressive programme, the size of Edcon's customer base was maintained at 4,1-million active accounts.
With higher levels of consu-mer indebtedness, the company said collections from customers had become increasingly difficult; however, net bad debts were 11,9% of average debtors — only marginally higher than the rate last year, of 11,6%.
Edcon said it was confident that operating cash flows together with borrowing facilities would be more than sufficient to fund its debt servicing obligations and operational cash flow needs for the foreseeable future.
In June, Edcon completed a repurchase of floating rate notes listed on the Irish Stock Exchange. Notes with a nominal value of €252 were repurchased at 55% of face value.
The company said with higher levels of consumer indebtedness, collections from customers became increasingly difficult over the year, however; net bad debts were 11,9% of average debtors, only marginally higher than the rate achieved last year of 11.6%.
Source: Business Day
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