Australia's Treasury Wine annual profit flat, sees weak H1
SYDNEY Aug 22 (Reuters) - Australia's Treasury Wine Estates , the world's second-largest wine firm, said full-year profit came in flat after a challenging year in which it destroyed excess U.S. inventory, adding that it expected weaker operating income for the current first-half.
Net profit after tax before one-off items was A$136.8 million ($123.4 million) for the year ending June 30, up just 1 percent from A$135.5 million a year ago. That compared with an analyst consensus estimate of A$135.7 million, according to Thomson Reuters Starmine data.
Treasury, the maker of Penfolds, Beringer and Wolf Blass wines, said the destruction of excess inventory resulted in a pre-tax material item charge of $154.3 million for 2013, and would impact fiscal 2014 operating earnings by up to $30 million.
It said its 2014 operating earnings would be in a range of $230 million to $250 million, due to the reduction of shipments in the U.S. and current exchange rate.
The first-half in 2014 would see lower operating earnings, also due to a plan to increase its brand building investment in Asia by up to 70 percent.
The company is moving away from cheaper, less profitable wines in the UK and Europe to target consumers developing a taste for premium wines in China and other emerging markets such as India, Brazil and Russia.
It has been losing market share in the key U.S. market to larger rival Constellation Brands.
($1 = 1.1087 Australian dollars) (Reporting by Maggie Lu Yueyang; Editing by Edwina Gibbs)
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