News: WOW UPDATE 1-Australia's Wesfarmers FY profit more than halves after Homebase embarrassment

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Aug 15 (Reuters) - Australia's biggest company by revenues Wesfarmers Ltd (WES) posted a 58.3 percent drop in full-year profit, dragged down by a loss and associated expenses booked upon divesting its UK hardware business.

Net profit for the conglomerate fell to A$1.20 billion ($868.68 million) for the 12 months to June 30, compared with A$2.87 billion last year.

Wesfarmers sold Homebase for a nominal one pound in May, just two years after buying it. With its sale, Wesfarmers brought to an end an embarrassing and costly offshore adventure.

The retailer said it booked a A$375 million loss on the disposal, while incurring A$1.02 billion in impairments charges, write-offs and store closure provisions.

Excluding one-offs, however, profit from continuing operations rose 5.2 per cent to A$2.90 billion.

Revenue from its continuing operations rose 3 percent to A$66.88 billion, reflecting a rise in sales helped by steep discounts to keep shoppers from shifting allegiance to entrant Amazon.com AMZN.O .

Among Australian retailers, Wesfarmers is the most exposed to Amazon through discount department stores Kmart and Target, stationery vendor Officeworks and hardware chain Bunnings, all selling types of goods available on Amazon.

Revenues from hardware retail chain Bunnings, the market leader in the country, rose 8.9 percent to A$12.54 billion.

Retail arm and Australian No. 2 supermarket chain Coles, which generates about 40 percent of Wesfarmers' earnings, however was a disappointment. Coles posted a 6.8 percent drop in profit before interest and taxes, while revenue growth was nearly flat over the previous year.

Wesfarmers revealed plans to spin off Coles in March taking stock of fierce competition in the sector, and said it expected to complete its separation during fiscal 2019, upon which it is expected to be worth A$16 billion.

Wesfarmers also declared a final dividend of A$1.20, unchanged from last year.

($1 = 1.3814 Australian dollars)