Treasury Wine Surges as Asian Penfolds-Drinkers Boost Profits

By Steve Wynne-Jones
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Treasury Wine Surges as Asian Penfolds-Drinkers Boost Profits

Treasury Wine Estates, the world’s largest listed vintner, surged after posting annual earnings that beat analyst estimates as sales to Asian consumers boosted revenues in the region by 46 per cent.

Earnings before interest, tax, adjustments for the value of vineyards and one-time items was A$225 million ($165 million) in the 12 months ended 30 June, the maker of Penfolds Grange said in a regulatory statement Wednesday. That compares to A$185 million in the measure, known as Ebits, a year earlier, and beat the A$213 million average of ten analyst estimates compiled by Bloomberg.

The better result gives chief executive officer Mike Clarke more cash to develop and market new brands and get access to higher-quality grapes. He’s diverted bottles from lower-margin regions in Europe and Australia over the past year to the Americas, Treasury’s largest market by volume, and Asia, its most profitable.

“I’m pretty impressed -- the numbers beat on every metric,” Evan Lucas, a market strategist at IG Ltd. in Melbourne, said by phone. “They’ve been steadily moving in the right directions and done what they said they would do.”

In Asia, sales revenue from brands including Penfolds, Wolf Blass, Pepperjack, and Stags’ Leap increased at double-digit rates and Ebits jumped 53 per cent to A$73 million. The same measure fell by half in Europe, where the pound’s strength against the euro and Swedish krona reduced earnings by A$19 million.


Bloomberg News, edited by ESM


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