News: COL UPDATE 1-Australia's Coles posts flat half-year earnings hurt by underpayment costs

(Adds details on provision, results, quote)

Feb 18 (Reuters) - Coles Group Ltd (COL) , Australia's second-biggest grocery chain, posted near-flat half-year earnings on Tuesday as it included a A$20 million cost provision for payments to underpaid salaried employees.

Earnings before interest and tax for the 27 weeks ended Jan. 5 came in at A$725 million ($486.7 million) compared with A$722 million a year ago.

It was within the A$710 million to A$730 million range the firm gave in a surprise update in early February.

In a separate statement, Coles said it identified that for less than 1% of its total team members there are some differences between their remuneration and the industry standard.

“We aim to make Coles a great place to work, and apologise to those team members who have been unintentionally affected," Chief Executive Officer Steven Cain said.

The provision comprises A$16 million from its supermarkets arm and A$4 million from the liquor division.

Net profit for the 27 weeks ended Jan. 5 rose 1.7% to A$498 million ($334.31 million).

Coles earlier this month said an effective Christmas campaign helped it post better-than-expected sales at its key supermarkets division, while more promotional and clearance activity weighed on its liquor business.

Total sales revenue, which includes supermarkets, liquor and fuel and convenience retail businesses, rose 3.3% to A$18.85 billion.

Coles declared an interim dividend of 30 Australian cents per share, its first half-year dividend since it was spun off from retail conglomerate Wesfarmers Ltd (WES) in late 2018.

($1 = 1.4896 Australian dollars)