• H1 net profits up 103.1% to AUD106.2m (US$96m)
  • First-half net sales flat at AUD811.9m
  • H1 operating profits slip 37.6% to AUD45.8m 
  • New CEO/MD appointed to replace David Dearie 
TWE was helped by a tax benefit in H1

TWE was helped by a tax benefit in H1

Treasury Wine Estates (TWE) has seen its first-half net profits helped by a tax benefit, which offset a sharp slide in operating earnings. 

The Melbourne-headquartered group said today (19 February) that net profits in the six months to the end of December jumped 103.1% to AUD106.2m (US$96m), helped by a AUD80.5m tax benefit. Operating profits in the period fell, however, by 37.6% to AUD45.8m, while sales were down slightly, by 0.6%, to AUD811.9m. 

The group's performance in Asia and its domestic market of Australia were blamed for the drop. 

TWE also announced today it has appointed former Coca-Cola Co, Premier Foods and Kraft Foods executive Michael Clarke to head up the business in a dual role as MD & CEO.

Clarke has been hired to help rescue the business after a tough year for the group, which has included a AUD160m (US$145m) writedown in the US, which led to the departure of CEO David Dearie in September. TWE also issued a profits warning last month, which saw its share price drop by 20%. 

Warwick Every-Burns, who has been acting as the group's interim CEO, called today's results "disappointing".

"While we expected the first half to be below the prior year principally driven by lower shipments in the US and increased investment in marketing and distribution, the extent of the earnings shortfall was exacerbated by much tougher trading conditions in Asia, and more recently a numer of factors in Australia," he said. 

Looking ahead, however, Every-Burns struck a positive tone. He said the "fundamentals" that make business attractive have not changed. "Global supply and demand continue to move towards balance," he said. "TWE is well positioned to satisfy the growing consumer demand for premium wine in both existing and new market channels."

Shares in TWE were today trading up 2.16% at AUD3.78 at 10.54 in Sydney.

For an in-depth look at the company's performance by region, click here.