CHILE: Earthquake hampers Vina Concha y Toro in Q1
Pricing improves for Concha in Q1
Vina Concha y Toro has said the earthquake that struck its native Chile earlier this year was the main reason for a drop in sales and profits in the firm's first quarter.
The quake, which struck at the end of February and killed around 800 people, forced Concha y Toro to suspend wine production and logistics operations for ten days.
A fall in export volumes related to the quake, coupled with the sharp rise of the Chilean peso currency, caused a 2% fall in Concha y Toro's net sales for the three months to the end of March. Sales were CLP67.77bn (US$127.8m) for the period, against CLP68.98bn a year earlier, as a 7% decline in export sales overshadowed a 13% rise in domestic wine sales.
Operating profits slipped by 17% for the quarter, as higher prices per bottle in key markets failed to offset the effects of the quake, currency and higher distribution expenses, said the Cassillero Del Diablo brand owner.
Group net profits tumbled by 26% against the same period of 2009, to CLP6.52bn from CLP8.9bn a year earlier.
Concha y Toro, which also owns Cono Sur wines, said the effects of the earthquake have been contained.
"It is important to point out that all the company’s assets are covered by insurance, including losses due to stoppages," it said.
"The company believes that the impact of the earthquake on its operations was concentrated on the months of March and April, following which conditions will tend to return to normal for the rest of the year."
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