Tainted: Woolworths is slashing NZ supermarkets value by $1.6b. Photo/Alex Cairns
Woolworths is slashing the value of its New Zealand supermarkets by $1.6 billion to $700 million, blaming a “weaker medium-term outlook”, higher interest rates, and a delay in new initiatives, reports Businessdesk.
fruit, reports Businessdesk.
The non-cash impairment follows the first review of goodwill in the parent company’s balance sheet since Woolworths bought the supermarkets owned by Progressive Enterprises in 2005.
With New Zealand assets currently on Woolworths’ books at $2.3 billion, the impairment equates to a 69.56 percent reduction in value.
In a statement to the ASX, Woolworths also said it expects a 42% decline in earnings before interest and tax (ebit) to $71 million in the first half of the current financial year.
Of that, only $13 million was attributable to direct costs of eliminating the Countdown brand, which was tainted by allegations of supermarket price speculation, and reverting to the Woolworths brand in New Zealand.
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