TWE reports record profit bolstered by China & US

Australian wine giant Treasury Wine Estates (TWE)’s has announced record half-year profits to 31 December 2016, with levels up by more than double to AU$136.2 million (US$104.6 million), bolstered by strong performances in China and the US.

Its Earnings Before Interest, Tax, SGARA and material items (EBITS) also grew 58.8% to AU$226.8 million (US$174 million).

Asia reported the fastest EBITS growth rate of 75.6% to AU$79 million (US$60.6 million). Its sales volume “increased strongly and price increases across key brands delivered positive NSR per case growth,” said the company, which owns Penfolds, Wolf Blass, Beringer and Rawson’s Retreat.

The US market’s EBITS grew to AU$90.7 million (US$69.7 million), a 75.4% increase, thanks to its acquisition of Diageo Wine and portfolio premiumisation, the company said.

TWE acquired Diageo Wine in January last year, “to secure increased access to Luxury and ‘Masstige’ fruit which would in turn, deliver immediate portfolio mix benefits to TWE’s US business,” the company explained.

Australia & New Zealand (ANZ) reported 13.2% EBITS growth to AU$53.1 million (US$40.8 million).

“I am delighted to report a strong interim 2017 financial result highlighted by further margin accretion, excellent cash conversion and outstanding EPS growth, despite the higher share base. All regions delivered double digit EBITS growth and importantly, growth was delivered sustainably,” TWE’s CEO, Michael Clarke, commented.

Positive on TWE’s outlook, the company expects the second half of its fiscal year 2017 to be broadly in line with the first half.