Wesfarmers (WES) H1 2025 earnings summary

Executive summary

• Revenue rose 3.6% year-over-year to $23.5 billion, with net profit after tax up 2.9% to $1.5 billion, driven by strong performances from Bunnings and Kmart Group despite challenging economic conditions.

• Interim fully-franked dividend increased 4.4% to $0.95 per share, reflecting robust execution and focus on shareholder returns.

• Portfolio actions included the sale of Coregas for $770 million, wind-down of Catch, and divestment of WesCEF LPG and LNG businesses to improve returns and streamline operations.

• Continued investment in transformation, digital, and sustainability initiatives across divisions, with acquisitions in Officeworks and Health to support digital and health strategies.

• Operating cash flows declined 11.1% to $2.6 billion, mainly due to higher tax paid and working capital investment.

Financial highlights

• Revenue: $23.5 billion (+3.6% YoY); NPAT: $1.5 billion (+2.9% YoY); EBIT: $2.3 billion (+4.7% YoY); basic EPS up 2.9% to 129.4 cents.

• Operating cash flows: $2.6 billion (-11.1% YoY); free cash flows stable at $2.0 billion.

• Interim dividend: $0.95/share (+4.4% YoY); net financial debt at $3.9 billion; debt to EBITDA improved to 1.7x.

• Gross capital expenditure up 2.9% to $594 million; net capex at $555 million.

• Cash realisation ratio at 108%; net tangible assets per share increased to $3.39.

Outlook and guidance

• Retail divisions expected to benefit from strong value credentials and expanding addressable markets, with Bunnings, Kmart Group, and Officeworks maintaining sales momentum into H2 FY25.

• Covalent lithium refinery commissioning on track for mid-2025, with ramp-up over 18 months; capex guidance unchanged at $1.1–$1.3 billion for FY25.

• Cost pressures and inflation expected to persist, but productivity, digitization, and hedging initiatives to help offset impacts.

• Industrial businesses remain sensitive to commodity prices, FX rates, and seasonality.

• Focus remains on long-term value creation, portfolio discipline, and investment in digital and omnichannel capabilities.