Woolworths Plans NZ$1.6 Billion Write-Down of its New Zealand Unit As Business Slumps

By Mike Cherney

SYDNEY--Australian grocer Woolworths said it would recognize a large write-down of its New Zealand food business in its upcoming half-year result, but that its main Australian food unit has been performing well.

Woolworths said it would recognize a non-cash impairment of 1.6 billion New Zealand dollars (US$980 million), noting that half-year earnings in New Zealand are expected to be 42% below the prior year. The write-down is required because of a weaker medium-term market outlook, and time is needed for a transformation plan for the unit to reach full potential, the grocer said.

However, Woolworths said that because its main Australian business has remained solid, it expects growth in company-wide earnings before interest and tax--or Ebit--to be in the range of 2.8% to 3.8% before significant items for the half year. Ebit before significant items is expected in the range of 1.682 billion Australian dollars (US$1.11 billion) to A$1.699 billion.

The grocer also said it would recognize a A$209 million loss tied to its investment in drinks and hotel company Endeavour because of an accounting change.

Woolworths will release its full half-year result on Feb. 21.

Write to Mike Cherney at mike.cherney@wsj.com

(END) Dow Jones Newswires

January 28, 2024 17:14 ET (22:14 GMT)

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