Foster’s group ltd reported a 13.5% drop in profit at A$355.7 million in the first quarter as compared to A$411.3 million recorded in first-half previous year. Company reported that its wine unit suffered the most with Australia’s strong currency slashing the division’s earnings by 83 million Australian dollars.
Australia’s biggest beer and winemaker last quarter result showed that wine earnings from Asia fell 26 percent to A$6.4 million. Europe and the Middle East had a 76 percent drop in earnings to A$12 million. The company witnessed global reduction in sales volumes, lost market share in beer and wine earnings dipped but said there were signs that US demand is stabilizing. Company reported falling profit margin per case as reported in North America wine fell by more than half to 9 percent from 19.7 percent.
“We are cautiously optimistic that the wine industry is pretty close to hitting the bottom edge in the U.S. market,” managing director for the Americas Stephen Brauer told a media briefing.
Chief Executive Officer Ian Johnston said “We will continue to evaluate all structural options and No options have been ruled in or out.” The company has split the sales team into specialists for beer and wine last year, which undone an earlier integration strategy that resulted in company losing out customers.