Penfolds owner Treasury Wine Estates has hiked its dividend and signalled growing optimism in overseas sales while revealing a profit slide of 61 per cent.
Australia’s largest winemaker and owner of the Devil’s Lair brand in Margaret River today revealed its flagship Penfolds brand recorded $1 billion in net sales revenue in 2023-24, up 22 per cent, due to strong sales in Asia.
However, Treasury’s overall profit slumped to $98.9 million off the back of a $354 million non-cash impairment to its cheaper brands revealed to the market in early August.
Cheap wine struggled in 2023-24, with poor shipments of sub-$15 labels resulting in a 7 per cent earnings slide for non-luxury labels to $76 million.
That result reflected declining global interest in cheap wine, which was offset by strong interest in luxury labels.
Treasury is seeking to offload a suite of those long-held commercial brands including Yellowglen, Wolf Blass, and Lindeman’s.
While lower-range products struggled, it was a different story at the other end of the Treasury portfolio.
Luxury label revenue was up 30 per cent and US earnings grew 13 per cent to $230 million.
The company’s return to China after three years of trade tariffs and strong US sales were flagged as key drivers of growth for the coming year.
Luxury labels including Penfolds and Beringer now account for about half of its sales revenue.
Premium range wines including Pepperjack and 19 Crimes made up about 38 per cent of revenue, with the remainder accounted for by commercial-grade wine.
TWE’s group earnings were up 13 per cent to $658 million.
Shareholders will receive a 19c-per-share partially franked dividend.
