Tesco Swings to Loss on Korea Costs -- Update
07 Oktober 2015 - 11:05AM
Dow Jones News
By Saabira Chaudhuri and Rory Gallivan
LONDON-- Tesco PLC swung to a loss for the half-year as
Britain's largest retailer reported lower revenue and losses from
discontinued operations, such as the Korean business it recently
agreed to sell.
Its net loss for the 26 weeks ended Aug. 29 was GBP365 million
($556.39 million), compared with GBP6 million profit a year
earlier, which included earnings from Korea.
Revenue, excluding value added taxes and fuel, fell to GBP23.9
billion from GBP24.3 billion.
Tesco's results included charges of GBP563 million, including a
$177 million restructuring charge and a GBP187 million reversal of
commercial income recognized in previous years. Tesco said its
operating profit--which strips out large one-time charges--was
GBP354 million compared with GBP779 million.
The company isn't paying an interim dividend and said its
full-year expectations are unchanged.
The results come a year after Tesco chairman Richard Broadbent
said he would step down in light of an accounting issue tied to
commercial income that led to profit being overstated by GBP263
million.
Under Chief Executive Dave Lewis, Tesco has been working to
regain some of the traction it had before a period of slumping
sales hammered profit, while the company's reputation was tarnished
by the scandal.
"Our transformation program in Europe has accelerated growth and
reduced operating expenses, and in Asia, we have gained market
share in challenging economic conditions," Mr. Lewis said.
Tesco has cut prices on a raft of items, aimed to simplify
relationships with suppliers, put more staff on the shop floor and
closed unprofitable stores. The company reported its U.K.
like-for-like sales had fallen 1.1% in the first half, while
international like-for-like sales climbed 1%.
Last month it agreed to sell its South Korea business, Homeplus,
for $6.1 billion in cash, and Chairman John Allan recently
indicated that Tesco wasn't interested in making further overseas
disposals.
Tesco earlier this year hired Goldman Sachs to explore options
for its data analytics Dunnhumby unit. But the company was unable
to find a buyer who would pay the price it wanted and on Wednesday
said it was keeping the business.
Write to Saabira Chaudhuri at saabira.chaudhuri@wsj.com and Rory
Gallivan at rory.gallivan@wsj.com
Corrections & Amplifications
Tesco said its operating profit--which strips out large one-time
charges--was GBP354 million compared with GBP779 million. An
earlier version of this article misstated the year-earlier
figure.
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(END) Dow Jones Newswires
October 07, 2015 04:50 ET (08:50 GMT)
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