Treasury Wines Estates is flagging a $160 million hit to its pre-tax earnings in the 2013 financial year, with its shares tumbling 7.56% by 11am.
The nation’s largest pure-play wine producer says its bottom line had been impacted by discounts to move excess stock, along with the destruction of aged inventory in the United States.
However, the company says in a statement it expects earnings before material items, which includes the $160 write-down, to be in line with analysts’ expectations of $216 million.
“We have been operating at the higher end of our desired distributor inventory levels in the US,” TWE chief executive David Dearie says in a statement.
“TWE’s leadership team in the Americas believes old and obsolete product is limiting the company’s growth ambitions. As such, decisive action must be taken to address these barriers to growth.”
It’s the one of the largest setbacks for the company in recent months. Since being spun out of Fosters in 2011, TWE has largely enjoyed a charmed share-market run. Today’s post-fall price ($5.38) is still well above the $3.36 its shares fetched immediately after the demerger.
Business lending rose in May despite dip in personal loans
Business lending rose by 2.5% in May, according to data released today by the Australian Bureau of Statistics.
A seasonally adjusted total of $31.747 billion was committed to business loans in May, compared to $30.964 billion in April.
However, personal lending fell 3.1% to a seasonally adjusted $8.087 billion in May, compared to $8.345 billion in April.
Australian market hinges on China
Australian shares are largely unchanged at noon, following the release of second-quarter Chinese GDP data.
The data showed China grew 7.5% in the year to June, in-line with expectations. This gave little direction to local markets.
At 12pm, the ASX200 was up 0.02%.
Earlier this morning, the Australian dollar dipped below $US0.90 after China’s finance minister was quoted as saying the world’s second largest economy was growing at a slower pace than forecast. The dollar recovered when the same minister said he had been misquoted, and spiked pending the release of the GDP data.