2016 Half-year Results

24 February 2016

Half-year ended 31 December 2015 Variance to pcp
Operating revenue of $33.5 billion 4.7%
Earnings before interest and tax of $2,110 million 1.6%
Net profit after tax of $1,393 million 1.2%
Earnings per share of $1.24 2.6%
Return on equity (R12) of 10.0 per cent (from continuing operations1 and excluding NTIs2) 30 bps
Return on equity (R12) of 10.0 per cent (40) bps
Interim dividend (fully-franked) per share of $0.91 2.2%


Wesfarmers Limited has reported a net profit after tax (NPAT) of $1,393 million for the half-year ended 31 December 2015, an increase of 1.2 per cent on the prior corresponding period. Earnings per share rose 2.6 per cent, and return on equity (R12) from continuing operations1 and excluding NTIs2 increased 30 basis points to 10.0 per cent.

Managing Director Richard Goyder said strong performances across the Group’s retail portfolio supported continued earnings growth in a period in which low commodity prices provided a significant headwind for the Group’s Resources business.

“The Group’s retail portfolio delivered a strong increase in earnings before interest and tax (earnings or EBIT) of $176 million or 9.2 per cent during the half supported by good Christmas seasonal trading in all businesses,” Mr Goyder said. “Investment in customer value, store network improvement and better merchandise offers and service drove increased earnings across the retail portfolio. Overall, return on capital for the retail portfolio improved strongly as a continuing focus on capital efficiency further leveraged the earnings growth recorded.

“Due largely to a substantial decline in revenue in the Resources business, and despite a continued strong focus on cost reduction, earnings across the Industrials division were $158 million lower. The Resources business was impacted by lower export coal prices and $70 million of currency hedge book losses. Depressed conditions across the resources sector also adversely affected earnings in the Industrial and Safety business.

The Chemicals, Energy and Fertilisers business performed well in this environment, achieving a solid increase in earnings through strong plant performances, reduced gas input prices and an initial contribution from the Group’s interest in Quadrant Energy.

“Cash realisation and free cash flow generation remained strong for the half with working capital well managed. Consistent with the growth in earnings per share, the interim dividend has been increased two cents per share to 91 cents per share.”

1Discontinued operations for the 12 month period to 31 December 2014 included the Insurance division’s contribution of $121 million and $82 million of pre-tax and post-tax earnings respectively.
2NTIs for the 12 month period to 31 December 2014 include $196 million of post-tax earnings (which include a $939 million gain on disposal of the Insurance division, a $677 million non-cash impairment of Target's goodwill and a $66 million Coles Liquor restructuring provision).

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