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Coles Posts $1B Profit, CEO Claims High Prices Don’t Reach Bottom Line

Coles has posted a rise in net profits and group sales for the 2022 financial year, although CEO Steven Cain said the higher grocery prices don’t necessarily reach the bottom line, due to other costs incurred by the supermarket giant.

General food price inflation rose 4.3 per cent in the June quarter, but these slim costs were all but wiped out by $240 million in COVID-19 costs.

“There are a lot of costs coming through our business at the moment,” Cain (pictured below) said of the inflationary impact. He also called for higher immigration levels to fight inflationary pressures.

“Obviously, there’s inflation around, but there’s no doubt that we’re not maximising the potential of the Australian economy,” Cain said.

“We need more skilled and unskilled people to do all the jobs that need doing at the moment; otherwise it will drive further inflation.”

Coles group sales rose 2 per cent to $39.74 billion, slightly higher than analysts’ forecasts of $39.59 billion.

Net profit rose 4.3 per cent to $1.05 billion, up from 2021 profits of $1.01 billion.

EBIT dropped 0.2 per cent to $1.87 billion, hit by omicron costs, as well as Witron and Ocado transformation projects that totalled about $30 million.

Coles supermarkets sales rose 2.2 per cent to $34.62 billion, while earnings grew 0.8 per cent to $1.72 billion.

Liquor sales climbed 2.3 per cent to $3.61 billion, while EBIT fell 1.2 per cent.

Coles Express was the biggest liability. Sales fell 5 per cent to $1.11 billion, while earnings plunged 37.3 per cent due to COVID lockdowns.

Coles declared a fully franked, 30c-a-share, final dividend, payable on September 28.

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