Treasury Wine Estates (TWE) has recorded a $1 billion loss in a financial year blighted by heavy asset write-downs and changes to its portfolio.
The Penfolds maker told investors earlier in the week that it is recording a $558 million hit in write-downs from its US supply chain, before the release of its end-of-year earnings report.
But the full report has now arrived, and TWE’s investors have learned that they will be going without a dividend payment this year.
The news was joined by figures showing a 12.8 per cent decline in net sales, to $2.56 billion, and an after-tax loss of $1.08 billion.
“While our financial performance reflected evolving market conditions and the proactive measures to ensure brand and channel health, we made substantial progress towards reshaping the business for long-term success,” said TWE CEO, Sam Fischer.
“Penfolds, once again, proved it is a global luxury wine brand that transcends the wine category. The growth in depletions globally, led by China, was particularly pleasing, reflecting the continued excellence of our execution and strengthening demand power.”
Fischer called the effort to “rebalance customer inventories” in China and the US has helped to protect the brand, while the ongoing transformation program is set to increase the focus on the group’s high potential brands.
Sales in the Americas, however, declined by 21.2 per cent. Sales of the flagship Penfolds brand fell by 7 per cent.
“We are also making strong early progress in aligning our supply chain to our vision for a simpler TWE, and accelerating initiatives to improve performance in the Americas,” Fischer added. “While there is more to do, we are confident these initiatives will position TWE for improved and sustainable growth over time.”
