Subscriber login Close [x]
remember me
You are not logged in.

Australian Vintage posts $123.6 million loss

Published:  26 August, 2009

Australian Vintage, owner of Nepenthe, McGuigan and Tempus Two wine brands, has posted a $123.6 million net annual loss after sustaining a $127 million impairment charge early this year following a strategic review of its operations.

But the company has remained upbeat claiming that it has been bucking a general decline across the wine industry by registering a 9% rise in sales tto $288.3 million and a net profit aside from the impairment of $4.3 million.

Shares in the company fell by more than 3% in value after the profit announcement was released to the exhange.

Australian Vintage chief executive, Dane Hudson, said that export sales of its wine brands had reversed a general 10% decline trend in Australian wine.

However, he warned that the Australian wine industry's current operating model is not working.

"There are still too many grapes being grown and too much winery capacity. Lower demand, lower prices, the global financial crisis and a high dollar are exacerbating the issues,'' he said.

"Our view is that grape supply and wine production capacity is at least 30% higher than it needs to be.''

He added that the "old golden age" for the Australian wine industry had "well and truly gone''.

Australian Vintage also revealed that it had reduced its debt by $24 million over the past six months and was targeting a 100% net profit growth this year.

"We do not underestimate the challenges but we are confident that we have right-sized our production base and put in place flexible supply arrangements that can deliver more than 100% net profit after tax growth for 2009/10, before significant items and assuming the Australian dollar does not strengthen further,'' Hudson said in a statement.