The New Zealand Wine Company

The New Zealand Wine Company Limited – June 2009 Full Year Annual Report

2009 is a watershed year for the New Zealand wine industry with the oversupply of wine from Vintage 2008, the global financial crisis and the recession impacted New Zealand economy all contributing to provide challenges not previously faced by the industry.
 
The New Zealand Wine Company (NZWC) announces an audited net profit after tax for the 30 June 2009 of $1,283,000, compared to the equivalent $2,044,000 earned for the same period in 2008, a decrease of 37%. Both years included a net contribution from a number of NZ IFRS revaluation adjustments.
 
Basic earnings per share were 14.8 cps for the 30 June 2009 year with the comparable earnings per share for the 2008 year being 23.6 cps.
 
Total revenue earned for the 30 June 2009 full year was $12,346,000 which represents a 4% increase on the $11,904,000 earned for the same period in 2008.
 
A fully imputed final dividend of 2 cents per share for the full year will be paid to shareholders on 25 September 2009, which is a decrease of     3 cents per share over the final dividend declared for the same period in 2008. The total fully imputed dividends paid in 2009 will be 4 cents per share, which is a decrease of 4 cents per share or 50% over the 8 cents per share paid in the prior 2008 year.
 
Chairman Alton Jamieson said that:
 
“Wine sales revenue, margins and net earnings for the past 12 months were squeezed as significant volumes of surplus bulk wine were cleared by the New Zealand wine industry. NZWC took the tough decisions to sell its surplus 2008 bulk wine stocks at low or loss making margins to enhance cashflow and reduce its wine stock to manageable levels. The net impact has been that reported 2009 underlying earnings are significantly down on the same period in 2008.”
 
“Vineyards were managed very carefully this year to reduce harvest yields and the total 2009 grape intake of 2,478 tonnes was targeted to provide a stock of good quality 2009 wines that match the global sales demand for the company’s bottled wines.” 
 
“A disciplined approach will be maintained by NZWC in 2010 to limit its harvest yields for a further year, while the New Zealand wine industry works through what may well be its most challenging period ever. NZWC and the industry are working hard to balance wine supply with global sales demand while also striving to enhance the value of Brand Marlborough and Brand New Zealand bottled wines.”
 
“NZWC plans to bounce back from an unsatisfactory 2009 financial year by returning underlying net earnings in 2010 to around 2008 levels. And Directors remain confident that the future growth opportunities for Marlborough Sauvignon Blanc remain very positive, once the current structural oversupply imbalance is satisfactorily resolved.” 
 
“NZWC’s CarboNZeroCert TM certification will continue to provide an important point of difference to assist the company to increase its wine sales and also secure new wine listings in its key export markets.”
 
A full copy of the Annual Report for the twelve months ended 30 June 2009 including the Directors’ Report, comparative financial statements and explanatory notes is available on the NZWC web site, at: http://www.nzwineco.co.nz/financial.aspx.
 
Authorised for public release.
 
For further information please contact:
 
Alton Jamieson
Chairman, The New Zealand Wine Company Limited
PO Box 67, Renwick, Marlborough
Tel: +64 21 964 995
 
or
 
Rob White
CEO, The New Zealand Wine Company Limited
PO Box 67, Renwick, Marlborough
Tel: +64 3 572 8200 or +64 21 448 332