Australia's Treasury Wine Estates Ltd, the world's largest standalone winemaker, on Wednesday reported a nearly 1% fall in first-half profit, as tougher competition in the United States overshadowed growth in its Asia business.
The Melbourne-based company has faced increased competition in the U.S. market where surplus wine has been selling at lower prices, prompting the winemaker to lower its fiscal 2020 core earnings outlook in January.
The owner of the luxury Penfolds and Wolf Blass labels reported net profit of A$211.4 million (€130.6 million) for the six months ended 31 December, compared with A$213.4 million (€131.8 million) a year ago.
The Americas business, the company's biggest revenue source, posted core earnings of A$98.3 million (€60.7 million), down 17% from a year ago.
However, earnings from the Asia region rose 19% to A$175.5 million, helped by sustained demand for its premium wine labels in China.
Treasury said it was too early to assess the impact of the coronavirus outbreak in China on earnings, however, it added that "if there was sustained material impact on consumption, it would impact 2020 earnings".
The company's total net sales revenue rose 0.9% to A$1.55 billion (€0.96 billion). It declared an interim dividend of 20 cents per share.