SYDNEY Feb 28 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.