Foodstuffs South Island yesterday reported an improved operating profit of $219.3 million for the 12 months ended February.
It also increased its payout to members to more than $196 million.
Sales improved in the period to $2.3 billion, up marginally from the previous corresponding period (pcp).
Finance costs dropped to just below $8 million in the period from more than $9 million in the pcp.
The larger payout to members meant a lower before-tax profit of $15 million but the reported profit was dragged into a loss of $23.9 million because of changes to depreciation introduced by the Government.
The co-operative paid an extra $36.3 million in tax in the period because of the changes to depreciation.
Foodstuffs operates New World and Pak'n Save supermarkets, Four Square, Henry's Beer Wine and Spirits, Trents Wholesale and Murdoch Manufacturing.
Chairman Robin Brown, of Rangiora, said revenue for the group increased despite the disruption caused by the Christchurch earthquakes.
Total distributable profit increased due to improved margins, increased supplier rebates and lower interest costs.
During the reported period, the aftereffects of the recession were taking their toll on all businesses and uncertainty continued to plague the New Zealand economy, Mr Brown said.
The lacklustre economic growth during the latter half of the year was further compounded by the Canterbury quakes, rise in fuel prices and increase in GST which placed an added burden on the already fragile New Zealand economy.
Businesses had to re-evaluate their situation to incorporate the effects of the disaster, he said.
"The cost of the two major earthquakes will ensure that financial restraint remains the norm as New Zealand slowly recovers from the recession."
The hospitality and food service industry was particularly hard hit by the recession, which was further exacerbated by the quakes forcing businesses to close, Mr Brown said.
Coming out of the recession and the aftermath of the earthquakes, the co-operative strived to place itself in the best possible position to capitalise on future opportunities.
The impact of the quakes on Foodstuffs South Island was largely mitigated due to a comprehensive insurance programme, he said.
The banner groups had traded steadily despite the difficult trading conditions, Mr Brown said.
Nationally, the combined wholesale turnover for the three Foodstuffs companies was $8.07 billion, up $89 million, or 1.12%, on the 2010 year.
