Australian wine company Cockatoo Ridge Wines has posted a set of depressing figures.

Today (28 February), Cockatoo said that net profit after tax for the six months to 31 December nosedived by 91.6% on the corresponding period a year earlier to A$106,000 (US$83,557). Sales for the period proved equally miserable, falling 55.6% to A$7.8m.

"The challenges facing the Australian wine industry have been well documented," said Cockatoo managing director, Neil MacKenzie. "It is evident that the 2007 vintage intake will be substantially below that of previous years. Subsequently, the large surplus of Australian wine will be dramatically reduced and the sale of bulk wines below cost, which has prevailed for some time, will presumably disappear.

"In the short term, this will have the effect of allowing wine companies such as CKR to reduce inventory levels and therefore cut interest bills, however, margins will only improve if sales prices can be lifted after many years of stable pricing.

Cockatoo plans to sell its Sovereign vineyard for a gross sum of A$5.7m, and has received an offer for its Playford vineyard which is under consideration. Net proceeds from both sales would be used to reduce bank debt.

The company noted, on a positive note, that this year's winemaking costs will be substantially below those in 2006, as stock levels fall into balance due to the sale of surplus bulk stocks and sale of some grapes from company-owned vineyards.