By Andrew Starke

Constellation Brands has reported net income of US$106.2 million for the six months to August 31, up from $US21.9 million for the same period last year.

The substantial difference has been attributed to cost-cutting over the first quarter of the 2010 financial year and major restructuring costs that impacted on the bottom line last year.

The world’s biggest winemaker by volume is listed in both the USA and Australia.

Constellation Brands said branded wine sales dipped four per cent to $752.4 million as shoppers traded down to less-expensive products.

However, branded wine organic net sales on a constant currency basis increased two per cent overall, three per cent in North America, five per cent in Australia/ New Zealand and decreased five per cent in Europe.

Constellation revealed that consumers are also trading down in their beer purchases, skimping on pricier imports in favour of domestic brews.

Analysts said the results improved on previous quarters, but timing issues create uncertainty for the rest of the year.

Constellation Wines Australia is known to be considering a restructure of its local business unit with premium and bulk wine operations likely to be split into two arms.

Constellation shares have lost much of their value on the Australian Stock Exchange over the past 18 months, down from $2.79 in January 2008 to $1.81 today (Oct 7).

The Shout Team

The leading online news service for Australia's beer, wine, spirits and hospitality industries.

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