Foster's Up and Down in H1 Earnings

Foster's Group (FGL), Australia's largest and the world's second-largest alcoholic drinks company posted mixed results today.The drinks company announced a 6% rise in first-half net profit on as a strong performance in Australia and Europe, which offset currency-related declines in the US.The company announced its slowest growth in first-half net profit in several years on Tuesday, with demand for wine from the US slowing and the strong dollar crimping earnings.Profit before one-offs for the six months to Dec. 31 rose to A $393.5 million from A $371.4 million.Reuters analysts said this beat market forecasts of A $384.5 million before one-offs, but was still well below the double-digit pace of recent years and the 22% rise in the six months to June 2007.Nevertheless, net profit after tax and including items fell 28% to A $398.6 million.In the US, earnings before interest and tax dropped by 32.2% to A $98.3 million, due to a drop in sales for Australian wine, increased input costs and a high Australian dollar.The Foster's wine business in the US, which is ranked at number two in the country, is facing a slowdown in consumer spending and it said wine sales slowed sharply in November and December. "December quarter retail sales of Foster's wines were significantly lower than expected, " the company said in a statement.Also in Australia, Foster's mainstream beers have come under pressure as consumers switch to higher-margin premium beers.Foster's holds 50% of Australia's beer market duopoly, but smaller rival Lion Nathan, which has a 42% share, has benefited from a focus on higher-margin premium beers, where total industry sales have jumped 12%.Foster's shares have fallen 10% in the 2008 calendar year compared with 12% for the broader market.Shares in Foster's fell 8 cents to $5.78..

 Tue Feb 2008 04:02 (10 months, 3 weeks ago)
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