Concha Y Toro is still coming under pressure from the appreciation of the Chilean peso, the company's CEO has said.

Eduardo Guilisasti told reporters yesterday (12 October) that profit margins at the Chilean winemaker are expected to be squeezed further in the second six months of the year as grape prices increase and the peso continues to strengthen against the dollar in particular.

In August, Vina Concha y Toro reported that consolidated revenues increased by 8.6% to CLP51.816bn (US$89.5m) in the second quarter of 2005. However, rising costs hit operating income, which decreased 6.6% to CLP8.956bn in the second quarter 2005. Operating margin decreased to 17.3% from 20.1% as a result of higher wine costs and the impact of the appreciation of the Chilean peso.

"Tighter (profit) margins will be seen in the second half," Guilisasti said. He added that the strengthening of the peso against the dollar "will have an impact, which will more noticeable in the second half."

Concha Y Toro garners about 60% of its income from exports.