Concha y Toro had a tough third quarter, according to results released last week

Concha y Toro had a tough third quarter, according to results released last week

Late last week, Concha y Toro reported slowing sales and profits growth in its third quarter, with ForEx proving the main drag. Here, we take a closer look at the Chilean company's performance in the three months to the end of September.

  • Chile operations - Exports

In the third quarter, export sales from Chile slipped by 2% on the corresponding period a year ago. Although volumes rose by 7.5%, ForEx movements "highly influenced by the Brexit", hit hard.

In the UK, the group's largest export market, price increases introduced in the period could hold back volumes in the coming quarters, Concha warned. That said, UK volumes in Q3 were up 7%. Most of the group's export markets delivered volume growth, most notably Asia at +17% and Africa at +60%. Japan and South Korea both posted +20% sales increases for the group. Europe, which accounts for almost half of the company's Chilean exports, increased volumes by 5.5%. Exports from Concha's Chilean operations to the US, however, fell by 5%.

  • Chile operations - Domestic

In value terms, the group's domestic sales in Q3 were up by 7% on a 5% lift in volumes. Sales in premium-and-above outpaced non-premium, the company noted. "Premium-and-above represented 8% of (the company's) domestic volumes and 29.1% of (Concha's) domestic sales in Chilean Pesos." The group holds almost 28% share of Chile's overall wine market.

  • Argentina operations

In value terms, sales from Concha's operations in Argentina, led by the Trivento brand increased by 7%. Export sales were up by 6% with domestic sales rising 9%. Domestic volumes climbed markedly in the quarter, by 34% (to 182,000 cases), with shipments abroad hitting 342,000 cases, a 10% lift.

The depreciation of the Peso in Argentina resulted in a near-20% slide in average sales price for the division.

  • US operations

Concha's Fetzer unit in California, which also owns the Bonterra brand, saw its export volumes in Q3 leap by 20%. However, domestic shipments within the US were flat, although this was "in line with the third quarter of 2015". Overall volumes from US operations inched up by just under 2% to 503,000 cases. In value terms, the top-line was up by 1% thanks to rising sales both at home and abroad.