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Wine losses hit Foster's bottom line

Aug 24 2010 12:15 AFP

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Melbourne - Earnings by Australia's Foster's beat expectations on Tuesday, but the drinks giant recorded a net AU$464m loss after write-downs in its wine business.

The result, which follows a net profit of $438.3m a year ago, comes after the group faced impairment charges on its wine assets of $1.3bn.

Excluding these losses, Foster's posted a net profit of AU$698.3m - higher than the underlying earnings of AU$673.6m predicted by analysts, Dow Jones Newswires said.

Foster's, which did not declare a final dividend, said net sales revenue was also lower, at AU$4.29bn compared to AU$4.49bn a year ago.

Foster's CEO Ian Johnston said the group's performance was improving and it was on track to demerge its wine division from its beer assets in the first half of 2011.

"While no final decision has been made, the timeline for a potential demerger remains the first half of calendar 2011," he said.

The group has been subject to takeover speculation, with interest in the more profitable beer division, while the wine business suffers from oversupply in the Australian market and a soaring Australian dollar.

 
 
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