(Adds costs details, background) Feb 23 (Reuters) - Woolworths...

(Adds costs details, background)

Feb 23 (Reuters) - Woolworths Group Ltd (WOW) on Wednesday posted a 21% drop in half-year profit, as pandemic-induced costs offset earnings from consumers stocking up on essentials during long spells of lockdowns and restrictions.

Woolworths and its smaller rival Coles Group (COL) collectively sell about two-thirds of the country's groceries and have benefited heavily from people stocking up pantries for essentials during the various stages of lockdowns.

However, with surging COVID-19 cases across the country, Woolworths faced labour shortages as several infected employees were forced to isolate, pushing costs higher.

The company reported A$239 million in COVID-related costs during the first half, due to the impact of the pandemic on its stores distribution centres.

"Indirect COVID costs have also remained high, mainly due to continued end-to-end supply chain disruption," said Chief Executive Officer Brad Banducci.

Australia's biggest supermarket operator said net profit after tax from continuing operations came in at A$676 million ($488.00 million), lower than A$850 million a year earlier.

It added that expenses are likely to remain elevated in the third quarter, before eventually moderating as the second half progresses.

($1 = 1.3856 Australian dollars)