Exchange rate losses on wine exports have forced Australian Vintage to cut its net profits forecast for the current financial year.

Australian Vintage said today (26 May) that it expects net profits after tax to increase by 75% for the 12 months to the end of June, compared to the same period last year.

The McGuigan wines producer predicted in February that full-year profits, before one-off items, would double. But, an unfavourable rate for the Australian dollar against sterling (GBP) has taken some of the shine off the wine group's resurgence.

Volume sales of branded wines are expected to rise by 22% for the year, but net sales will be also be damaged by currency exchange rates, paticularly British sterling, the firm said. The UK represents around 30% of Australian Vintage's annual sales.

"The results reflect a good outcome and we remain very focused on managing our costs, cash flow and balance sheet so that we can translate this into acceptable shareholder returns," said the group's interim CEO, Neil McGuigan.

The company said its 2010 grape harvest was 3% down on 2009, at 158,000 tonnes.

Earlier today, Australian Vintage rival Foster's said that it expects a AUD1bn impairment charge on its own wine business during its current financial year.