Penfolds owner in the red as China, US issues continue
A premium winemaker whose portfolio includes the prestigious Penfolds brand has been left in dire straits after being forced to swallow one-off hits to its own bottom line.
Treasury Wine Houses on Monday reported a net loss of $649.4 million in the first half, compared to a net profit of $220.9 million in the previous period.
The legal result reflected an after-tax loss of $751 million due to impairment of U.S. assets.
Excluding this impact, interim net profit decreased by 46.3 percent to $128.5 million.
However, Treasury Wine’s underlying result (earnings before interest and tax, SGARA and tangible items) was $236.4 million; that was slightly above the $225 million to $235 million estimate, albeit at a nearly 40 percent drop.
The underlying outcome reflected the ongoing impact of trends in the US and Chinese markets, including the restriction of shipments due to parallel import activities in China.
“TWE has taken strategic action to maintain brand strength and healthy sales channels in key markets by reducing customer inventory primarily in the US and China,” it said in a statement.
The group expects second half 20205/26 underlying earnings to be higher than in the first half, thanks to increased momentum in its California business.
Treasury Wine recorded sales of $1.3 billion in the first half, a 16 percent decrease compared to the previous period.
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