News Column

Treasury Wine Estates finishes in the red after £157m US charge

August 22, 2014


AUSTRALIAN winemaker Treasury Wine Estates (TWE), the world's second largest winemaker, swung to its first annual loss and missed analysts' forecasts as the group grappled with massive oversupply in its US arm and sales fell globally.

TWE's results were hit by an A$280m (157m) impairment charge related largely to reductions in the asset value of commercial brands, particularly in its US division. TWE booked a A$100.9m loss for the year to 30 June, down from a profit of A$47.2m the previous year.

"TWE has delivered this result despite a number of operational and trading headwinds during the year," said chief executive Michael Clarke. "Having taken the necessary steps in the final quarter of fiscal 2014 to drive improved performance, including increasing consumer marketing, reducing TWE's cost base and addressing structural challenges within the business, I am confident the company is now positioned for future success."

The company is currently being pursued by US private equity giants KKR & Co and TPG Capital Management for rival $3.1bn takeover bids.

On a constant currency basis, TWE's global revenues fell 5.3 per cent to A$1.8bn.

TWE's shares closed down 1.8 per cent at A$5.20 on the Australian stock exchange. Reuters

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Source: City A.M. (UK)

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