The maker of the iconic Penfolds wine brand, Treasury Wine Estates (ASX: TWE), today reported a massive jump in sales and profits fuelled by the fast expanding Chinese market.
The company announced revenue for 2018 rose 16 per cent to $1,508 million, and earnings before interest, tax and several material items rose 19 per cent to $338.3 million.
Earnings grew 31 per cent in Asia, 12 per cent in the Americas, 10 per cent in Europe and 13 per cent in Australia and New Zealand.
The company went into the year with higher stocks of its premium wines such as Penfolds Grange, and has been able to exploit its reputation at the top of the market.
CEO Michael Clarke said: “The results presented today demonstrate not only the strength of our premiumisation strategy and global balance, but highlight the strength of our regional business model.
“We are confident we have the brands, the people and the business models in place to maintain the momentum of this half and continue delivering sustainable growth for shareholders.”
The company sees great opportunity to boost its market share in China with its multiple country of origin offering.
One opportunity is in French wines, the biggest import category in China, where Treasury has only a five per cent market share.
Treasury estimates its earnings will grow a further 25 per cent in 2019.
The company’s shares rose six cents to $16.81 on the announcement.
Picture: Treasury Wine Estates/Penfolds wine barrels
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