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Concha y Toro posts 15% rise in profits

08 November 2021 By Patrick Schmitt

Viña Concha y Toro has closed its third quarter with a 15.4% year-on-year rise in profit, which the group attributed to a better product mix; an improved domestic market, and revenues from real estate.

Concha y Toro’s leading label, Casillero del Diablo, enjoyed more than 100% value growth during Q3

The growth means that the group has reached a profits figure of US$30.316 million for this period, while accumulating $68.062m of profit in the first nine months of 2021, representing a year-on-year increase of 23%.

This result was achieved despite a 2.9% drop in revenues between July and September, which were the result of lower sales in export markets and the US, due to what the group described as “a global shipping and land transport logistics crisis”.

In contrast, the domestic market showed sales increases in value of 25.1%, reflecting a higher average price of wine and strong sales in the beer and spirits category, while Argentina registered an increase of 36.8%.

“In the quarter, the company has been focused on managing this supply chain crisis, leveraged on the strengths of its integrated distribution model,” said Viña Concha y Toro CEO, Eduardo Guilisasti.

He added, “However, the crisis impact on our shipments was translated into a decline of 2.9% in the consolidated revenue in Q321. With that, revenue had an increase of 4.3% in the nine months ended September 30th, in comparison with the previous year.”

Among the areas of profit generation, the group picked out the growth of higher-value brands in the portfolio, notably Casillero del Diablo, which enjoyed value growth during Q3 of more than 100%, Marques de Casa Concha (+30.7%), Trivento Golden (+126%) and Don Melchor (+55.9%).

Chile’s non-wine business posted strong sales growth according to the company, driven by beers and spirits, which increased 68.9%.

Consequently, the operating margin increased 40bp to 17.6% in the third quarter, partly reflecting the income from the sale of real estate assets, and a higher profitability due to better sales mix. Gross margin increased 100bps to 40.6%.

Consequently, the Ebitda for the quarter was at similar levels to 3Q21, with an expansion of the margin on sales of 70bp to 21.4%.

“Looking forward, the company remains confident on its strategy, its long-term fundamentals, and on its ability to adapt to change, as well as on its internal targets on results set towards 2022,” concluded Eduardo Guilisasti.