Australian Vintage back in the black

Australian Vintage back in the black

Australian Vintage has returned to profits in the first half of its fiscal year, despite a slide in sales.

Net profits for the six months to the end of December reached AUD10m (US$9m), Australian Vintage said today (17 February).

One-off charges, largely related to efforts to adapt to oversupply on the Australia wine market, dragged to the group to losses of AUD128m in the first half of the prior year.

Cost savings drove a return to profits for Australian Vintage, which produces McGuigan wines.

Net sales for the half-year tumbled to AUD116.5m, from AUD146.4m in the same period of the previous year.

Sales fell in spite of a 45% rise in exports of higher value bottled wine for the six months.

"Our branded growth has been driven by a focus on making and marketing high quality wines at the right price point rather than chasing sales,” said Australian Vintage CEO Dane Hudson.

"Whilst our operations have improved when compared to the same period in 2008, our industry is still facing a difficult trading environment exacerbated by an oversupply of wine and a high $AUD."

The group said discussions "continue" with Constellation Brands over a potential merger of operations in Australia and the UK.

For the full announcement, click here.

Yesterday, Foster's Group reported weak wine sales in its own fiscal half-year.