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4w ago

Treasury Wine Estates Posts Heavy Half-Year Loss, Halts Dividend in Supply Reset

Management seeks to restore channel control through shipment cuts to China and the US.

Bottles of Penfolds Grange wine and other varieties, made by Australian wine maker 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
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Overview

  • TWE reported a half-year net loss after tax of A$649.4 million and suspended its interim dividend.
  • The company booked a non-cash, pre-tax impairment of A$987.6 million tied largely to its Americas unit, including A$676.1 million in goodwill.
  • Net sales revenue fell 16% to just under A$1.3 billion, while EBITS declined 40% to A$236.4 million on weaker trends in the US and China.
  • Wholesaler inventories will be cut by about 400,000 cases in China and 500,000 in the US to curb grey-market flows and support pricing.
  • Penfolds revenue decreased roughly 10% with divisional profit down nearly 20%, as the TWE Ascent program targets about A$100 million in annual cost savings and management signals a second-half improvement.