Woolworths’ minor drop in profits but supermarkets show strong result
Woolworths Group, one of Australia’s two supermarket giants has reported its first net profit drop since it was listed on the stock exchange in 1993. An interim net loss of 16.8% in its half-yearly results is mainly due to a one-off AUD $300 million restructuring charge to its Dick Smith brand.
Net profit after tax (NPAT) dropped to AUD $966.9 million, down nearly seventeen percent (17%) from its previous corresponding year ending January 1. Had it not been for the one-off cost to Dick Smith, Woolworths Group net profit from continuing operations after tax would have been up 3.2 % to AUD $1.184.3 billion.
However, the report showed solid growth across its Supermarkets sectors.
For its Australian supermarkets division, the report showed solid growth in Sales and in Earnings before Interest and Tax (EBIT).
EBIT grew 6.3% from AUD $1,468.2 million to AUD $1,560.0 million over a half-year period. Sales from food and liquor and petrol enjoyed an increase of 5.9% over the half-year period.
Australian Food and Liquor
Australian food and Liquor sales for the half-year were AUD $19,571 billion, an increase of AUD$0.8billion or 4.3% over last year. Comparable store sales in Australian Food and Liquor for the half year increased 1.5%. Sales growth was impacted through deflation of seafood, bakery and deli produce in the second quarter. Sales for lines such as cool meats, soft drinks were also damaged by cooler temperatures in December 2011.
Woolworths opened 25 Australian supermarkets during the half year bringing its total to 864. Seventeen stores were opened in the second quarter with 14 of these opened in November/December 2011. The report stated that the Woolworths group plans to open another 14 Supermarkets in the 2012 financial year.
According to the report, Petrol sales for the half year increased by 16.6% to AUD $3.4 billion. Petrol volumes increased 2.5% for the half year with market share and customer number increasing. Total merchandise (non-fuel) sales were up 9.4%.
As at end of December 2011, Woolworths had 591 petrol stations including 132 Woolworths/Caltex alliance sites. Woolworths opened 10 additional petrol canopies during the half-year, and plans to open a further 8 sites in the 2012 financial year.