AUSTRALIA: Foster’s Sees Drop In H2 Profit After Weaker Wine Sales
Foster's Group, Australia's largest brewer, has seen its second-half net profit fall by 9.4% to A$319.7m, from A$353m last year, due to lower sales at its US wine business. Foster’s said the strong Australian dollar knocked A$70moff earnings in the full year. Full-year net profit before one-off items was down to A$713.2m, from A$716.1m a year ago.
The Australasian beer business saw net sales rise 5.8%, despite volumes falling by 2.1%. It noted that its core Victoria Bitter brand reversed a long-running sales decline and actually grew in the year to June 30. In the Americas, wine sales fell 8.9% in constant currency terms, due to lower consumer spending and reduced demand for Australian wine. Taking into account the gains of the Australian dollar, sales fell 19.5% while profits fell 41%.
In June, Foster's cut its profit outlook as it began a review of the underperforming wine business. Foster's said it would give no update on progress of the review, which is on track to report by end-2008, and cited the uncertainty of the review for giving no 2009 forecast. Foster's Chairman David Crawford said options from the wine review included acquisitions as well as disposals, but he said Foster's had not considered any of the Constellation brands.
The group also said it was making progress in the search for a new CEO, after Trevor O'Hoy stepped down in June.
NamNews - Wednesday 27th August 2008