Australian winemaker hit as it destroys excess wine
Australian winemaker Treasury Wine Estates (TWE) has reported its first annual loss due to slower sales in China and oversupply in the US market.
TWE posted a net loss of 101m Australian dollars ($94m; £57m) for the year ended June, compared to a net profit of A$47m the previous year.
Slow sales last year led to the group destroying thousands of bottles of excess wine at its US division.
The firm also reported an impairment charge of A$384.5m.
Without the one-off charge, the group would have earned A$112.8m in net profit after tax.
TWE is the world's largest listed winemaker and owns brands such as Wolf Blass, Rosemount and Lindeman's.
It is also behind Australia's most well-known winemaker, Penfolds.
The company said sales in China were hit by the government's austerity measures. But that was offset by "continued strong volume growth in Hong Kong and increasing momentum in South East Asia."
In a statement released with the earnings, the company acknowledged it went through a challenging year. And it said it plans to improve on its performance by boosting its marketing operations in growth markets, notably the US and Asia.
For the current financial year ending June 2015, chief executive Michael Clarke said: "Investing in our sales and marketing capabilities is an important step.
"Crucially it will also facilitate a deeper understanding of our customers and underpin more collaborative and sustainable relationships across all our regions."
The group has recently been a takeover target and it is sitting on two offers.
US based KKR is teaming up with Rhone Capital and they have made an offer of $3.2bn for TWE. That is 11% more than their original offer for the winemaker.
Meanwhile an anonymous bidder has, in recent weeks matched that offer.
TWE made no mention of the takeover offers in its earnings statement.
The winemaker has a turbulent history and is currently undergoing restructuring that will see 175 job cuts.
TWE was formed in 1995 as the wine division of Australia's Foster's group, brewers of the eponymous beer. However, continuing losses led to it being demerged in 2011.