UPDATE 1-Australia's Treasury Wine upbeat on H2; shares jump
SYDNEY Feb 28 (Reuters) - Australia's Treasury Wine Estates Ltd, the world's second-largest wine company, expects a significant recovery in the second half driven by sales of luxury and popular prestige wines, particularly in Asia.
Treasury Wine, the maker of Penfolds, Beringer and Wolf Blass, said Thursday it is betting on higher sales of middle- and up-market wines to drive second-half earnings, especially in the growth markets of Asia, after higher costs and poor 2011 vintages contributed to a 23 percent fall in first-half profit.
Chief executive David Dearie said the company remained committed to the overall guidance of "mid-single digit" growth in earnings before interest and tax in fiscal-year 2013, with the outlook brightened by "extremely good" vintages in key regions such as California and New Zealand.
The Melbourne-based company said its first-half net profit after tax and before one-off items was A$45.0 million ($45.9 million), compared with A$58.6 million a year earlier.
Earnings before interest and tax were down 20 percent to A$73.4 million from a year ago.
Last October, Treasury Wine had warned its first-half earnings would slide 20 percent, blaming poor weather for denting production of premium wines and higher corporate costs.
Treasury Wine's shares jumped 5.5 percent to A$5.17 by 0121 GMT, compared with a 0.7 gain on the ASX index.
The company is trading at a price-to-earnings ratio of 35.28, significantly higher than a sector average of 14.72, which analysts said indicated the market was anticipating either a huge earnings upgrade or a takeover transaction.
In a briefing after the results, Dearie said Treasury Wine would continue to invest in Asia, particularly China, a region that outperformed in its first-half results.
Asia contributed 12.5 percent of EBIT growth in the period, while most other regions declined.
China has become a key market for Treasury Wine, which has been losing ground in the larger U.S. market to its bigger rival, Constellation Brands.
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