The Australian wine and beer group Foster’s has been forced into stating that it is not going to make any unscheduled announcements, by market speculation the group may issue a profit warning due to a tough wine operating environment in the US.
Foster’s president and CEO Ted Kunkel said, in a brief statement, that the company is well aware of its continuous disclosure obligations “and was not proposing to make any unscheduled announcements.”
Following a downgrade by rival Southcorp, and warnings from Peter Lehmann Wines, investors’ faith in the wine market has been shaky. This has been exacerbated by the California winemaker Robert Mondavi’s announcement last week that its second quarter earnings had fallen 4%.
Investors feared that Foster’s own wine operations, Beringer Blass, would also be hit by the US slowdown. Foster’s earns 45% of its profit from wine and the US is a key growth market for it, particularly since it paid A$2.8 billion for the Californian Beringer Wine Estates in 2000.
The worries saw Foster’s shares fall to their lowest level in more than two years in trading today.
Foster’s delivers its interim results in early February and is expected to record a net profit of about A$340m, compared with a net profit of A$322.2m a year before. Many analysts expect that Foster’s strong cash flow from its brewing arm will soften much of the impact of a US slowdown.
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By GlobalData
