US: Mondavi sells Chilean brand, reduces earnings
The California-based winemaker Robert Mondavi Corporation has sold off part of its joint venture in Chile with Eduardo Chadwick of Vina Errazuriz. And as a result of the sale the company has reduced its earnings guidance for the last quarter.
Under the terms of the agreement, Mondavi has maintained a 50% ownership in the Chilean luxury brands Sena and Arboleda, but has sold its interest in the Caliterra brand and assets to Vina Errazuriz.
Robert Mondavi will retain exclusive importation rights to Sena, Arboleda, Caliterra and Errazuriz in the US and continue to represent some of these brands in other markets around the world.
As a result of the sale, the company is reducing its earnings guidance for the quarter ended December 31, 2003 by US$3.9m or $0.23 per diluted share, to a range of $0.52 to $0.57 per share. Absent this one-time loss on the sale, earnings guidance for the quarter would not have changed.
Eduardo Chadwick, president of Vina Errazuriz and Robert Mondavi's joint venture partner in Chile stated: "We are extremely enthusiastic about these very positive changes which provide an opportunity for us to build Caliterra globally and to align our partner resources more strategically and efficiently with Sena and Arboleda."
Gregory M. Evans, president and CEO of Robert Mondavi, said; "We remain committed to the exciting growth opportunities of new world wines, including premium Chilean wines. This sale allows us to continue to participate in this category, while reducing our asset base, thereby improving financial returns."
Robert Mondavi will release its fiscal 2004 second quarter earnings on January 29, 2004.
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