TWE says first-half earnings could be down by around 20%

TWE says first-half earnings could be down by around 20%

Treasury Wine Estates (TWE) says it expects its first-half earnings to fall by around 20%, but full-year profits should recover to mid single-digits.

Poor weather and higher IT costs, brought about by its demerger from Foster's Group last year, are continuing to affect the Victoria-headquarted wine group, it said today (22 October). In August, the group revealed that total volumes had fallen in fiscal 2012, but that operating profits were up by 22% to AUD186.8m (US$194.8m).

It also warned that it would face challenges in fiscal 2013, such as having less premium wines available to meet consumer demand globally.

In a statement released today (22 October), TWE said: "In the first half of fiscal 2013, we expect constant currency EBITS to be below the same period in fiscal 2012 by approximately 20%."

However, looking ahead to fiscal 2014, the Penfolds and Wolf Blass producer said it retains a positive outlook, "underpinned by the iconic wines crafted from an exceptional 2012 vintage and a strong increase in non-current inventory". 

It added: "TWE remains well positioned to satisfy growing consumer demand for TWE’s luxury and masstige wines in both existing and new markets." 

Meanwhile, following the wine group's AGM in Melbourne earlier today, CEO David Dearie was reported as saying that the global wine glut "appears" to be over. 

The group is due to announce its first-half results on 28 February.