Australian retailer Foodland Associated has reported a 17% rise in its full-year net profit to A$120.1m (US$79.9m).

The result was slightly lower than market expectations of around $123m, as the company’s New Zealand department store chain Farmers gave a disappointing performance.

Foodland’s New Zealand supermarket chain Progressive reported earnings of $136.6m, compared to $65.7m a year earlier, helped by the integration of Woolworths New Zealand assets, which Foodland acquired last year.

Foodland’s sales rose 38% to $6.39bn, driven by the contribution of the Woolworths New Zealand stores.

The company’s Australian supermarket and food distribution operations posted a 7.5% increase in earnings to $96.9m.

Managing director Trevor Coates said the retailer was testing out a discount fuel offer in some of its Western Australia supermarkets, but was unlikely to accelerate the programme in response to the fuel discount schemes launched by rivals Coles Myer and Woolworths, reported Dow Jones International News.

Foodland’s Farmers chain posted a $5.4m fall in earnings to $37.6m, but Coates remained optimistic.

“We are optimistic we’ve seen the worst of the economy in New Zealand over the last six to nine months and the position seems to be improving with these initiatives,” Coates told reporters.

“We expect to certainly be able to improve the performance of the business in the current year,” he was quoted by Dow Jones as saying.

Foodland had been trying to sell the Farmers chain but abandoned the sale plans when it was unable to secure the right price.