CHILE: Concha y Toro exports lead FY sales rise

• FY like-for-like net profits plunge by 40.5% to CLP30.02bn (US$63.5m), but flat after one-off in 2011
• Net sales in 2012 increase by 6.6% to CLP450.4bn
• FY operating profits fall by 9.1%, hitting CLP53.68bn
• Asia FY sales up by 21%

Concha y Toro has posted a healthy rise in FY sales as exports made up for weak domestic demand.

Net profits dropped by 40.5% to CLP30.02bn (US$63.5m) in 2012, the Chilean wine maker said last week. The company blamed the fall on tough comparatives, thanks to a CLP15.6bn insurance payment in the final quarter of 2011 against losses incurred from an earthquake in March 2010 that halted production. However, net sales were up by 6.6% to CLP450.4bn over the same period while operating profits fell by 9.1% to CLP53.68bn.

Stripping out the one-off payment in 2011, net profits for the year came in flat, dipping by 1.6%.

The fourth-quarter numbers performed similarly. Net profits dropped by 65% to CLP8.5bn in the three months to the end of December, again thanks to the one-off income in the corresponding quarter in 2011, and net sales increased by 7.1% to CLP134.81bn. Operating profits were down by 4.8% to CLP15.4bn.

The producer of the Casillero del Diablo brand said export sales in 2012 rose by 5.8%, with Asia increasing by 21% and the UK market - which accounts for around a quarter of export volumes - up by 8.5%. Domestic volumes dropped by 4.9% on the back of a 4.4% price increase, with sales in value terms slipping by 0.7%.

Concha said FY volumes for its Argentinian operations have declined both in the domestic market and in the export market. “Our business in Argentina is consistent with its trend towards increasing its prices in order to enhance the profitability of the operation,” the company said.

Concha's share price dropped slightly after its results were announced last week but have since rallied.

To read the company's official statement, click here.