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Australia’s Woolworths to take $1 billion cost in opposition to NZ enterprise By Reuters

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(Reuters) -Woolworths on Monday mentioned it can report a non-cash impairment of NZ$1.6 billion ($974.40 million) in its 2024 interim outcomes as a result of the grocery store chain’s New Zealand enterprise faces challenges amid a weak market outlook.

The retailer additionally mentioned it can report a A$209 million loss ($137.35 million) after a evaluate of its 9.1% stake in native alcohol retailer Endeavour Group as a result of the corporate feels it now not holds “vital affect” over the ASX-listed peer.

“The Group will derecognise its fairness accounted funding in Endeavour Group and recognise an funding in Endeavour Group as a monetary asset, measured at honest worth,” Woolworths mentioned in an announcement.

The New Zealand impairment will lead to a write-down in opposition to the corporate’s present goodwill steadiness of NZ$2.3 billion, the corporate mentioned.

The nation’s largest grocer had acquired wholesaling and grocery store property of Foodland’s New Zealand enterprise in 2005 in a deal valued at A$3.38 billion.

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“It’s prudent to evaluate the carrying worth of the goodwill on the steadiness sheet that was booked as a part of Woolworths Group’s unique acquisition of Foodland’s New Zealand enterprise in 2005,” the agency mentioned in an announcement.

The New Zealand enterprise has been seeing results of a weaker medium-term market outlook and organisational transformation initiatives but to succeed in full potential, the corporate mentioned.

It expects to report first-half earnings earlier than curiosity and tax (EBIT) of NZ$71 million for the New Zealand section, 42% under what was recorded a 12 months in the past.

Woolworths mentioned it sees first-half unaudited EBIT between A$1.68 billion and A$1.70 billion, barely greater than the A$1.64 billion recorded the 12 months in the past.

The rise within the group’s EBIT is anticipated on the again of stable monetary efficiency by its Australian Meals enterprise and meals distributor PFD Meals Providers.

($1 = 1.6420 New Zealand {dollars})

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($1 = 1.5209 Australian {dollars})

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