It also cited the benefits of the business\u2019 transformation from Countdown to Woolworths for the improved New Zealand earnings growth.<\/p>\n
\u201cHowever, the economic environment remains challenging, and the market is highly competitive with a moderation in market growth rates over the half,\u201d Woolworths said.<\/p>\n
During the period, the group invested A$119m in its New Zealand business, a decrease from the A$141m spent in the prior comparable period.<\/p>\n
Earnings before interest, tax, depreciation and amortisation (ebitda) were A$260m, up 6.5% from A$244m.<\/p>\n
The company said it expected its New Zealand \u201ctransformation\u201d to continue in the second half, and sales for the first seven weeks of H2 had increased by 1.7% on the prior year.<\/p>\n
\u201cAs part of New Zealand Food\u2019s transformation, a strong productivity focus will continue to enable ongoing improvements to the customer offer and a focus on restoring sales momentum.\u201d<\/p>\n
The company noted it was facing legal proceedings in Australia and New Zealand, with the Commerce Commission alleging breaches of the Fair Trading Act 1986<\/a> regarding representations of prices paid for grocery products.<\/p>\n Woolworths confirmed in its interim report it was defending these proceedings and no provision was recognised in the financial statements before the outcome.<\/p>\n Overall profit<\/p>\n Woolworths posted an overall net profit (before significant items) of A$859m for the first half, up 16.4% on the same period a year ago, driven by improved sales and earnings across all segments.<\/p>\n Group earnings rose 14.4% to A$1.66b. Stripping out the significant items, including A$485m to remediate underpaid salaried staff, the bottom-line result was A$374m, down nearly 50% on the same period a year ago.<\/p>\n Total group sales increased by 3.4% to A$37.1b.<\/p>\n Meanwhile, Woolworths continues to attract the attention of the competition watchdog.<\/p>\n