AUS: "Slower" US drags on Foster's Group H1
Foster's Group has posted a comparative lift in first half net profit, as a "slower US wine market" held sales flat for the period.
The Australia-based drinks company said today (19 February) that net profit for the six months to the end of December was up by 6% year-on-year before significant items, coming in at A$398.6m (US$367.2m). Factoring in significant items, in particular the sale of Foster's breweries in India and Vietnam in the previous period, net profit attributable to Foster's shareholders came in 28% down on the A$553.5m reported in H1 2006.
Net sales for the period slipped, meanwhile, by 0.5% to A$2.36bn, with the Americas region seeing sales fall by 32.2% to A$98.3m.
Sales in Australia, Asia and Pacific were up by 14.1% to A$515.5m, meanwhile, with Europe, Middle East and Africa delivering sales growth of 16.5%, totalling A$45.1m.
"A shift toward premium products, improved pricing outcomes and the realisation of efficiency benefits contributed to solid first half growth in earnings", said company CEO, Trevor O'Hoy. "Performance in Australia, Asia, Pacific and Europe was strong, with improved product mix, revenue growth and cost performance.
"However our North American earnings were impacted by exchange rates, a slower US wine market in November and early December, a decline in merchandising effectiveness and a planned change in mix."
Looking forward, O'Hoy warned that the US business would remian "challenging", although the Americas division is still expected to return to constant currency earnings growth in the second half. ""We make great wine and have some wonderful global wine brands, but we are yet to make it a great business" he said. "The Foster's management team and I are united in our resolve to grow wine returns, and remain absolutely committed to driving shareholder value."
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