Wesfarmers Ltd. posted a significant profit slide despite higher revenue for the first fiscal half ended Dec. 31, 2017, after writing down the value of its Target chain in Australia and the Bunnings U.K. and Ireland unit.
The Australian conglomerate's net profit plunged 86.6% year over year to A$212 million from A$1.58 billion. The result was mainly due to write-downs and impairment charges against the two businesses of A$1.26 billion, with the majority coming from Bunnings U.K. and Ireland and Target accounting for A$306 million. Excluding significant items such as the write-downs, net profit decreased 2.7% year over year to A$1.54 billion from A$1.58 billion.
Basic EPS came in at 18.7 Australian cents, down 86.7% from A$1.401 in the year-ago period. Excluding significant items, basic EPS decreased 3.2% year over year to A$1.36. The S&P Capital IQ consensus normalized EPS estimate for the first fiscal half was 26 Australian cents.
Revenue for the six-month period increased 2.8% to A$35.9 billion from A$34.92 billion in the year-ago period.
Across the group's main businesses, Bunnings U.K. and Ireland saw revenue drop 15.7% year over year to A$875 million from A$1.04 billion. Coles recorded a 0.4% decrease in revenue to A$19.98 billion from A$20.06 billion. Bunnings Australia and New Zealand posted a 10.2% rise in revenue to A$6.57 billion from A$5.96 billion. Revenue at the department store unit, which includes Kmart and Target, grew 3.2% to A$4.77 billion from A$4.62 billion.
Additionally, Wesfarmers declared a fully franked interim dividend of A$1.03 per share.