Adds more background, forecast
Feb 15 (Reuters) – Treasury Wine Estates TWE.AX said on Wednesday it remains on track to deliver strong earnings growth and margin expansion in 2023, after posting a 72.5% jump in first-half profit and hiking its interim dividend, boosted by sales growth in its luxury and premium brands.
The Melbourne-based firm said the growth in its premium and luxury wine sales outweighed a drop in volumes for the cheaper wines in its portfolio, adding that it expects “trading conditions for the remainder of the year to remain broadly consistent with those in the first half.”
The winemaker’s sales of premium brands in the United States and Australia remained resilient despite soaring living costs, while its pivot away from China continued to benefit it even as it navigates a new strategy for the country.
Treasury has bet on a new plan to produce wine in China and sell others made in France and the United States in the hope that it will rebuild its Chinese business after strained diplomatic ties made it one of the worst casualties of the tariffs on Australian wine imports.
Net sales revenue from Treasury’s Penfolds brand grew 7.2%, for the six months ended Dec. 31, while Treasury Americas logged a 4.1% rise. The Penfolds unit posted a 10% jump in earnings to A$181.6 million.
The world’s biggest standalone winemaker said its net profit attributable for six months ended Dec. 31 rose to A$188.2 million ($131.51 million), compared with A$109.1 million a year ago and a Visible Alpha consensus estimate of A$202 million.
The increased profit included one-off gains of A$15.4 million from the sale of surplus assets in the United States, the winemaker said.
The Melbourne-based firm declared an interim dividend of 18 Australian cents per share, compared with 15 cents last year.
($1 = 1.4310 Australian dollars)
(Reporting by Riya Sharma in Bengaluru; Editing by Shailesh Kuber)