WOOLIES:  5,822   +74 (+1.29%)  22/09/2019 00:00

Woolworths sees 2019 profit hit as writes down Australian unit

(Recasts with impairment on David Jones)

JOHANNESBURG, Aug 1 (Reuters) - South Africa's Woolworths Holdings expects full year earnings to decline as it again wrote down the value of its David Jones business due to structural changes that have hurt the Australian retail sector.

Woolworths, which sells clothes and organic food, said it would book an impairment of 437.4 million Australian dollars ($299.27 million) against David Jones, reducing the valuation of the upmarket chain to about 965 million Australian dollars.

Its shares fell 2.18% to 53.80 rand at the open.

"This write-down reflects sustained and unprecedented economic pressures and structural changes in the Australian market," a Woolworths spokeswoman said.

"The retail sector in Australia is currently in recession and the Australian economy has slowed to its weakest level since the global financial crisis in 2009."

The retailer, which has operations in 11 African countries also said the performance of the David Jones business had also fallen short of expectations.

In 2018, Woolworths booked a non-cash impairment charge of 712.5 million Australian dollars against the value of David Jones due to the same reasons.

It said that it expected a loss per share for the full year of between 92.4 cents and 129.3 cents, compared to a loss of 369.5 cents in the same period last year.

Headline earnings per share, which exclude the write down, are expected to either decline by 3.5% or rise by 1.5% from 346.3 cents.

HEPS is the main profit gauge in South Africa and strips out certain one-off items.

($1 = 1.4616 Australian dollars) (Reporting by Nqobile Dludla and Onke Ngcuka, editing by Deepa Babington and Emelia Sithole-Matarise)

2019-08-01 10:10:36

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