Woolies posts first-half loss of 16.8 per cent
Restructuring efforts and declining trading activity has led to Australia's largest supermarket chain posting a first-half loss of almost 17 per cent.
Woolworths Limited today (March 1) announced a net profit of $966.9 million for the 27 weeks to January 1 2012 - a 16.8 per cent fall on the $1.16 billion posted in previous corresponding period.
This was just above the average forecast of $961.4 million predicted by analysts.
The news of the loss came despite the group's total revenue rising by five per cent to $29.91 billion.
"This is a sound result considering subdued consumer confidence, deflationary pressures and the significant investment we are making in the business in line with our strategic priorities for growth," Woolworths chief executive officer and managing director Grant O’Brien said.
Sales from continuing operations grew by $1.4 billion - a rise of 5.2 per cent - to $28.9 billion. In terms of new operations, Woolworths opened 25 Australian supermarkets during the first half, bringing the total to 864.
Supermarkets achieved volume and market share growth, with an additional 26.9 million customers served compared to the previous corresponding period - a 3.8 per cent increase.
Petrol sales for the half year also increased, gaining 16.6 per cent from the previous corresponding period to reach $3.4 billion.
The group announced on January 31 a $300 million writedown of electronics store Dick Smith, forcing the closure of up to 100 stores in the next two years.
Despite Woolworths anticipating that trading throughout the rest of 2012 will remain subdued, the grocery giant believes it has a strong and sustainable business model, and is well positioned in all of its market segments.
The company said it continued to plan for future growth through expansion into the $40 billion home improvement market with its Master Home Improvement outlets - a joint venture with US giant Lowe's - a move that sees Woolworths challenging Wesfarmers rival chain Bunnings.
Woolworths chairman James Strong announced that a fully-franked interim dividend of 59 cents will be paid - a 3.5 per cent rise on the previous corresponding period. Morning trade in Woolworths shares was up slightly, gaining 0.59 per cent to reach $25.46.
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