Treasury Wine Estate posts sparkling half year results, boosted by exports to China
Treasury Wine Estates has posted record half year profits, driven by strong exports to China.
The Melbourne-based wine producer saw its profits jump by 17% on the previous year to reach A$219m, for the six months to December 31st, its highest level ever. Meanwhile, pre-tax profits for the period came in at A$338.3m, while the company said it expects these to surge by a further 25% in the year to June, and 15 – 20% in the the 2020 tax year.
Its Asia sales, which include China, rocketed 32.4% to A$393.9 million from the same period a year earlier. US sales, meanwhile, rose 20% while European sales grew 9%.
Treasury Wine Estates, which counts the brands Wolf Blass, Penfolds and Beringer in its portfolio also said it was expecting further growth in China, which sent its shares shooting up by 4%
“We are not seeing a slowdown in demand for our brands,” Treasury Wine CEO Mike Clarke said, referring to the company’s biggest export destination, China. The world’s largest standalone winemaker said it aims to increase its footprint in China by 50% in three years by the number of potential customers, and buy assets in France to exploit Chinese appetite for French wine he added.
The positive report comes in the face of wider concerns about weaker demand in China for products ranging from high-end fashion to milk powder as its economy slows, exacerbated by a bitter trade war with the United States.
Apple for one has issued a rare revenue warning, pointing to weaker iPhone sales in China, while Australian wine exports to the country are also feeling the pressure with growth hitting its slowest pace in four years.