Australia's Treasury Wine raises a toast for 2022 with bets outside China
FILE PHOTO: Bottles of Penfolds Grange wine and other varieties, made by Australian winemaker Penfolds and owned by Australia's Treasury Wine Estates, sit on shelves for sale at a winery located in the Hunter Valley, north of Sydney, Australia, February 14, 2018. REUTERS/David Gray//File Photo
Treasury Wine Estates on Thursday struck an upbeat tone for its prospects in fiscal 2022 outside mainland China, after the world's biggest listed winemaker posted higher annual profit and raised its dividend.
The Australian firm has suffered in the past two years due to a diplomatic spat that prompted Beijing to impose heavy taxes on multiple Australian goods and as pandemic-driven curbs battered sales.
That pushed the winemaker to ramp up its business outside China to cushion a hit from hefty tariffs in the lucrative market by re-directing supply of its prized Penfolds label to the United States, Europe and domestically.
The company "is positive on outlook across its key markets outside mainland China" for fiscal 2022, it said, as it aims for high-single digit average earnings growth over the long-term.
"The short-term impact of the COVID-19 pandemic on trading conditions in our key markets remains uncertain, despite recent reopening in on-trade channels and improving trade through cellar doors," Chief Executive Tim Ford said.
Treasury, which in February said it would split its business in brand-led divisions to target global growth, also forecast costs related to its Australian sourced wine to remain elevated next year.
It expects divestment of non-core U.S. brands to complete by the first half of 2022.
Net profit attributable for the year ended June 30 rose to AUS$250 million (US$180.95 million) from AUS$245.4 million reported last year. It, however, missed a Citi estimate of AUS$313 million.
The winemaker said annual operating earnings from the Americas region surged 23per cent, while it jumped 10per cent in Australia and New Zealand.
The Melbourne-based firm declared a final dividend of 13 Australian cents per share, compared with 8 Australian cents last year.
(US$1 = 1.3816 Australian dollars)
(Reporting by Riya Sharma, Savyata Mishra and Shashwat Awasthi in Bengaluru; Editing by Arun Koyyur)
