The Australian brewing and wine company, Foster’s Group, posted a first half net profit of A$335.3m, 4.1% up on the corresponding period last year. The company said an improved performance from its core Australian beer operations had offset slower growth in its global wine business. Revenues rose by 6% from A$2.53 billion to A$2.68 billion.
The result was towards the lower end of market forecasts which had ranged from around A$329m to A$345m. But Foster’s said focusing on the premium market in both wine and beer had helped to maintain margins and overcome the negative effects of wine discounting which had damaged profits at some of its competitors.
“We expect the next six to 12, maybe 18 months to be tough in the industry, but given the brand portfolio, we feel we’re better placed to weather the storm than most,” said Foster’s president and CEO, Ted Kunkel. “We always believed that premium brands offered the best defense against discounting. That has proven to be exactly the case.”
The group’s Australian beer operations recorded a 7.1% rise in earnings to A$260.8m, while the wine division registered earnings of A$253.7m, 3.9% up on last year.
Kunkel played down speculation that Foster’s might launch a A$4 billion-plus bid for its troubled rival, Southcorp, but confirmed that the company was in talks with Victorian wine company, T’Gallant, regarding a possible “bolt-on” acquisition.
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