Led by South African Saltzman family, Dis-Chem’s earnings slump below $40 million

Dis-Chem Pharmacies, one of Africa’s leading pharmaceutical retail groups founded by the South African billionaire Saltzman family, reported a decline in earnings, with its first-half 2023 fiscal year results falling below the $40-million mark.

Despite achieving a 9.4-percent increase in interim revenue to R17.9 billion ($970.6 million), the end of the COVID-19 vaccination boom had a significant impact on the group’s financial performance.

During the first half of the year, Dis-Chem recorded earnings of R702 million ($38.1 million), compared to R785 million ($42.6 million) in the previous year. Challenges in the economic environment, including higher interest rates, load-shedding-related expenses, and a depressed consumer base, have affected Dis-Chem, like its peers in the industry.

The company has also acknowledged that the conclusion of the COVID-19 vaccine administration and testing services, which had previously been a significant revenue driver, did not contribute to the current financial period. The Saltzman family-led retailer indicated that this change in circumstances influenced the reporting period’s performance.

Dis-Chem confident in second-half turnaround with focus on cost control

Now a leading retail pharmacy chain and healthcare group in South Africa, Dis-Chem Pharmacies was founded over four decades ago by Lynette and Ivan Saltzman.

Over the years, it has evolved into one of the country’s leading retail healthcare groups, providing a wide range of services, including dispensaries, family clinics, wound care clinics, and comprehensive self-medication centers.

The billionaire Saltzman family, who own a 35.1-percent stake in Dis-Chem, have solidified their status as one of the wealthiest families in South Africa. At the time of this report, the market value of their stake in Dis-Chem Pharmacies stands at R7.5 billion ($407 million).

Despite the challenging first half, Dis-Chem remains optimistic about its second-half prospects. The company aims to improve its performance through a focus on cost control measures, particularly in managing staff costs.

Notably, the differential between revenue growth and payroll growth has shifted from -3.7 percent at the end of the first quarter to +3 percent in October, suggesting a potential turnaround in the coming months.