Australian firm Wesfarmers posts NPAT of $1,213 mn in half year 2022

08 Mar '22

2 min read

Pic: Wesfarmers

Wesfarmers Limited, an Australian conglomerate with interest in apparel and retail products, has reported a statutory net profit after tax (NPAT) of $1,213 million for the half-year ended December 31, 2021. Excluding significant items, NPAT declined 14.2 per cent for the half. The company recorded revenue of $17,758 million in the same period.

“The first half of the 2022 financial year was the most disrupted period for our businesses since the onset of COVID-19, with extended government-mandated store closures and trading restrictions in Australia and New Zealand. The group also made significant investments in the half to support our team members, through payroll support and assistance programmes, to help manage the significant personal impacts from extended lockdowns,” Wesfarmers managing director Rob Scott.

The group’s retail businesses experienced volatility in sales during the half as a result of COVID-19. Retail sales between July and October 2021 were significantly affected by widespread lockdowns across New South Wales, Victoria, the Australian Capital Territory and New Zealand, with around 34,000 store trading days impacted and periods where almost half of the group’s retail stores were either restricted or closed, the company said in a press release.

Sales momentum improved as lockdowns and other restrictions were eased before deteriorating towards the end of the half, as cases of the COVID-19 Omicron variant began to rise. Ongoing constraints in global supply chains led to delays and additional costs, including higher container shipping expenses during the half. Domestic supply chains were also impacted by labour availability pressures as a result of isolation requirements and elevated absenteeism, leading to additional costs and impacting stock availability in some areas.

Operating cash flows of $1,556 million were 29.8 per cent below the prior corresponding period, driven by lower earnings for the half, lower cash flows from working capital movements, the payment of team member incentives relating to the 2021 financial year, a reduction in employee benefit provisions as employees took more leave following the easing of COVID-related restrictions, and higher tax installments. Divisional operating cash flows before interest, tax, and the repayment of lease liabilities declined 16.1 per cent compared to the prior corresponding period. The Group’s cash realisation ratio was 79 per cent for the half.

“The solid financial result delivered in such a disruptive environment highlights the strength of the Wesfarmers portfolio, and the capacity of divisional teams to adjust rapidly to meet customer demand,” added Scott.

Fibre2Fashion News Desk (RR)

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