Troubled Australian winemaker Southcorp has said that its first quarter earnings are in line with expectations. However, managing director John Ballard warned that the company did not expect to pay a dividend this year.

Ballard told shareholders at the company's annual general meeting that the first quarter "is travelling pretty much to our expectations".

Australia, he said was "a little ahead at this stage" thanks to strengthened sales and marketing operations, and what Ballard called "a substantial improvement in our relationships with key customers".

And of the UK and US, the company's two most important export markets, Ballard said the company was "essentially on plan profit wise". However he warned that pressures in overseas markets were keeping the company's volume forecasts conservative.

Analyst forecasts are of earnings before interest and tax (EBIT) of around A$170m in 2003/2004, which Ballard called "appropriate at this very early stage of the year."