Analysts are forecasting a 12% fall in full-year net profits at the Australian wine group, Southcorp. The performance of the company's wine operations is said to be the main factor behind the slide.

A direct comparison the previous year is problematic as this year will include the first full year of earnings from Rosemount which Southcorp acquired for A$1.5 billion in 2001. Last year's results only included a six month-contribution from Rosemount. But according to a survey of five analysts by Dow Jones, Southcorp is set to post a net profit before one-time significant items of A$155.9m for the year to the end of June. Profit forecasts ranged from A$153m to A$161m

The company's transition to a dedicated wine company after the disposal of its US water heater operation in April is expected to be hampered by the poor 2000 and 2002 vintages and discounting in the domestic market. The loss of the earnings from its water heater subsidiary is also expected to have a negative effect on the full-year results.