Australia’s Wesfarmers flags lower first-half profit hurt by coronavirus curbs

Australia’s Wesfarmers flags lower first-half profit hurt by coronavirus curbs

Australia's Wesfarmers flags lower first-half profit hurt by coronavirus curbs

(Reuters) – Australian retail conglomerate Wesfarmers Ltd on Monday said it expects to report first-half net profit after tax between A$1.18 billion ($851.72 million) and A$1.24 billion, a drop from last year’s A$1.41 billion hurt by coronavirus-induced restrictions.

The Kmart Group, one of the top revenue-contributing units of Wesfarmers, lost about a quarter of its store trading days during the first half of fiscal 2022 because of restrictions the country faced due to rising community transmission of the coronavirus, the conglomerate said.

A reduction in foot traffic along with rising COVID-19 related costs impacted profitability of the merchandise retailer Kmart Group, which generated about 32% of revenue in fiscal 2021—wesfarmers-annual-report.pdf?sfvrsn=9d9111bb_2.

For the fiscal half-year ended December 31, 2021, the Kmart Group’s earnings before significant items and payroll remediation costs is expected to be between A$170 million and A$180 million, sharply lower than last year’s A$502 million.

The Perth-based conglomerate, which is set to buy Australian Pharmaceutical Industries for A$763.6 million after a months long bidding war, expects COVID-19 related costs to continue to put pressure as long as new infections rise.

($1 = 1.3854 Australian dollars)

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