Treasury Wine 1st Half Net Profit Up 37% on Strong Asian Sales
By Mike Cherney
SYDNEY--Australian vintner Treasury Wine Estates Ltd. (TWE.AU) said its half-year net profit rose by 37%, reflecting strong performances in Asia, Europe and Australia and New Zealand.
The company said its net profit for the six months through December totaled 187.2 million Australian dollars (US$151.2 million). Its earnings before interest, tax and other items was A$283.3 million, up 25% on a reported currency basis.
Treasury declared an interim dividend of 15 Australian cents per share, an increase of 2 cents per share on the prior period.
Looking ahead, Treasury said it expects to achieve current consensus forecasts for A$524 million in earnings before interest, tax and other items for the 2018 fiscal year. It said earnings momentum in Asia, Australia and New Zealand and Europe is anticipated to continue in the second half, but that annual earnings are likely to be weighted to the first half.
In the 2019 fiscal year, the company said it expects earnings growth of about 25%.
"I am very excited about the outlook for the company, and am confident that the business model changes we are making this year, along with an increased availability of high-end wine, will set Treasury up for accelerated growth in FY19, FY20 and beyond," Chief Executive Michael Clarke said in a statement.
Treasury has benefited from rising demand in China for Australian wine, and also purchased the U.S. and U.K. wine business of drinks company Diageo PLC in recent years. Treasury said the integration of the Diageo wine business is complete, and also announced changes to its route-to-market operations in the U.S. The company further said it is exiting from some cases of lower-margin commercial wines, reflecting a move by consumers toward higher-quality wines in recent years.
Treasury said first-half earnings before interest, tax and other items in its Americas region increased by 8%, Asia grew by 48%, Europe rose by 17% and Australia and New Zealand jumped by 17%.
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(END) Dow Jones Newswires
January 30, 2018 16:49 ET (21:49 GMT)Copyright (c) 2018 Dow Jones & Company, Inc.