Connect with us

Investing

Australia’s Coles HY profit jumps as cost reductions offset supply issues

Published

on

© Reuters. FILE PHOTO: A woman walks in the fruit and vegetables section at a Coles supermarket in Sydney, Australia, February 20, 2018. REUTERS/Daniel Munoz

(Reuters) – Australian grocer Coles Group (OTC:) Ltd on Tuesday posted a jump in first-half profit helped by benefits from its cost reduction program with normalized trading conditions also bringing down pandemic-related costs.

Australia has been reeling under red-hot inflation which shot to a 33-year high last quarter, helping supermarkets churn in strong earnings on the back of higher selling prices that are also overpowering cost pressures.

Cole’s cost reduction program, Smarter Selling, brought home benefits of about A$100 million during the first half helping propel its earnings higher even as availability challenges over floods and major rail outages weighed.

Coles positively highlighted that COVID-19 related costs fell heavily during the first half of fiscal 2023, with the company shelling out just about A$20 million as compared with A$150 million a year ago helping it offset supplier cost inflation and supply chain challenges.

Coles has appointed Leah Weckert, a senior member of its executive leadership team, as its chief executive officer and managing director upon the retirement of Steven Cain, it said in a separate statement.

The country’s No. 2 grocer said net profit after tax for the six months ended the end of December came in at A$643 million ($444.44 million), compared to A$549 million reported a year ago.

The company’s supermarket business, which accounts for most of the group’s earnings, posted first-half sales revenue of A$18.85 billion compared with A$18.02 billion a year earlier.

Coles, which operates more than 800 stores in Australia, declared an interim dividend of 36.0 Australian cents per share, an increase of 9.1% from a year ago.

($1 = 1.4468 Australian dollars)

(This story has been corrected to say that the previous year’s first-half sales revenue was A$18.02billion, not A$18.58 billion, in paragraph 7)

Read the full article here

Advertisement

Trending