By Ian Neubauer
The Foster’s Group has announced a profit downgrade for 2008, with net after tax profit expected to fall from $717 million to between $700 million to $715 million.
Foster’s also expects to report a $70 million ($49 million after tax) non-cash write down to surplus Australian bulk wine inventories. It attributed the surplus to higher than anticipated yields from the current Australian vintage, lower than anticipated sales in the 2007-08 fiscal period and the impact of currency fluctuations on the global demand for Australian wine.
“Today we have recognised the direct financial impacts through revised guidance for our 2008 financial year earnings and write downs on the carrying value of global wine assets,” Foster’s chairman, David Crawford, said in an announcement to the Australian Stock Exchange. “The write downs are non-cash and we retain a robust financial position.”
The profit downgrade has impacted earnings per share, now expected to be between five and seven per cent compared to the previous guidance of approximately 10 per cent.
Foster’s shares were trading at $5.57 at midday today, representing an 8 per cent appreciation over the past seven days.