Treasury Wine Estates’ profits slump 25 per cent amid COVID lockdowns

Penfolds maker Treasury Wine Estates has seen its profits slump by a quarter as the coronavirus pandemic prompted restaurant and hotel closures around the world and the company faced a wine glut in the US, one of its key markets.

Net income fell 25 per cent to $315.8 million in the year to June 30, the Melbourne-based company said in a statement to the ASX on Thursday morning. Sales revenue for Australia's biggest wine company fell 6 per cent to $2.65 billion, with COVID-19 affecting its trading performance across the world.

Tim Ford, CEO of Treasury Wines.Credit:

Treasury Wine, which recently appointed long-term executive Tim Ford as its new chief executive, reported total EBITS (earnings before interest, tax, the agricultural accounting standard SGARA and material items) of $533.5 million, which was down 22 per cent on the previous year and in-line with a downgraded forecast of between $530 million and $540 million the company gave earlier in the year.

Despite the profit slump, Treasury declared a final dividend of 8 cents per share, fully franked, taking its payout for the year to 28 cents per share, or 64 per cent of net profit.

"Financial year 2020 was a unique year for TWE, our industry and the markets within which we operate," Mr Ford said.

"Our ability to navigate the disruptions of the COVID-19 pandemic through the second half of 2020 and continue to deliver profitability and strong cash flow performance is representative of the fundamental strength of our global business," he said.

The company declined to make any earnings forecasts for the new financial year, citing the uncertainties caused by COVID-19.

Shares in Treasury closed up 2.7 per cent on Wednesday at $11.44.

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