Treasury Projects Big Earnings Dropoff Through End Of 2012, Rebound in 2013

Treasury Wine Estates warned today that it expects earnings for the first half of its current fiscal year (the six-month period ends December 31, 2012) to decline by about 20%. The company blamed poor weather that affected the 2011 vintages in Australia and California, with fewer wines produced and at a higher cost, as well as higher corporate costs related to its demerger from Foster’s Group last year.

For the full fiscal year 2013 (ending next June), however, it expects growth in earnings to be in the mid-single digits after a strong recovery on the second half, coming from new high-end wines and price increases. Treasury also remains positive about its performance in fiscal 2014, expecting above average growth rates stemming from an exceptional 2012 vintage and an increase in non-current inventory. In the 12 months through June, Treasury’s global depletions declined 4.4% to 31.8 million cases, with revenue down 2.9% to A$1.64 billion ($1.7b) at constant currency. Excluding the U.K., where it “withdrew from unprofitable sales,” volume for the year rose slightly across Treasury’s global business.

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