CHILE: Exchange rate drags down Concha y Toro Q1

Vina Concha y Toro has reported a slide in sales and profits for the first three months of the year.

The Chilean wine company said yesterday (28 April) that net profit for the three months to the end of March dipped by 7.6% on the corresponding period a year earlier, coming in at CLP5.78bn (US$12.7m). Sales followed suit, albeit less markedly, slipping by 1.9% to CLP57.63bn.

Operating profit was also down, by 3% to CLP8.61bn.

Concha y Toro blamed the sales decrease on the strong appreciation of the Chilean peso and lower exchange rate - a year-on-year decline of 20% - in the quarter.

"I would highlight the growth achieved across all company businesses: exports to international markets, sales in our domestic market and the development of our subsidiaries abroad," said company CEO Eduardo Guilisasti. "Nevertheless, our result and the higher revenues in foreign currency were offset by the lower exchange rate and its sharp decline during the quarter."

On the export front, returns in US dollars increased 13.3% in the period, with the volume shipped in the quarter rising by 4.7%, driven by "strong sales in the premium category". Domestic market revenues increased 1.2%, with a volume increase of 0.9%.

Earlier this year, Concha y Toro said that net profit in 2007 leapt by 96.2% on 2006, coming in at CLP34.06bn. While operating profit rose by 81% to CLP47.25bn, sales increased by 23.3% in the year to CLP285.79bn.