Treasury Wine Estates attributes growth in the high-end Asian market to its 21.8% increase in operating profit (EBIT) to AUD 186.8m in its first full year of trading as a stand-alone business. TWE has declared a net full-year profit of AUD 90m. This result was driven by a 20.6% volume increase in sales to Asia but comes despite a decline in net sales value of 5.6%. TWE is selling less wine, but is doing so much more profitably. Exits from unprofitable sales avenues in the UK were largely responsible for the company’s overall 4.4% decline is sales to 31.7m 9L cases. Sales in America, currently TWE’s largest market, fell by 1.7%. On the other hand, TWE’s Asian markets account for just 3.5% of sales volume, but a staggering 20% of the company’s EBIT. TWE’s key export brands of Penfolds and Wolf Blass (which grew by 21% in Asia last year) were instrumental in the increase in sales volume across China and Hong Kong of 31%. CEO David Dearie is warning the market not to expect similar growth over the next reporting period due to a shortage of premium wine from the 2011 vintage, increased IT costs and a strategy to reduce inventory levels in the US.
