Australia's Treasury Wine Estates, the world's biggest listed standalone wine firm, said it swung back to a profit in the first half as ramped-up marketing for its best-known labels drove sales higher and it cut costs.
Net profit for the maker of the Penfolds and Beringer brands came in at A$42.6m ($33.21m) for the six months to December 31, down from A$106.2 million in the previous first half but a turnaround from the A$100.9 million loss it posted for the full 2014 financial year.
Half-yearly sales rose 9% to A$882.7m, and the Treasury Wine Estates (TWE) interim dividend of six cents, in line with the previous first half.
Net sales revenue for the TWE was up 8.7% on a reported currency basis and by 6.2% on a constant currency basis, which Treasury Wine Estates said reflected its improved portfolio mix.
Treasury Wine Estates said it is on track to deliver a 50% uplift in consumer marketing investment and a $35m overhead reduction program in this fiscal year.
“While the first half of fiscal 2015 included the benefit of the successful transition of the Penfolds release date, we have also progressed with our overarching strategic initiatives to reset the business by significantly increasing investment in our brands and removing excess costs, addressing the structural challenges within our portfolio, fixing the quality of our base business, and taking initial steps to optimise our capital base,” said Treasury Wine Estates chief executive Michael Clarke.
“While we are at the start of our transition from being an order-taking, agricultural company to a
brand-led marketing organisation, the progress we have made to date and the results achieved by
the team demonstrate that TWE is starting to address fixing the core of the business and is being
set up for sustainable, future success”.