The New Zealand Wine Company says projected underlying net earnings for the June 2009 year will be down significantly compared to a year earlier, although sales volumes are on target.
The fall in earnings resulted from aggressive price competition in the British market, the strength of the New Zealand dollar against the pound, and with decisions taken by the company to clear excess bulk wine stocks at a loss, the company said today.
New Zealand Wine Company chairman Alton Jamieson said tough decisions taken during the past six months were necessary.
The decisions were made in a trading environment where the global financial crisis compounded on difficulties created by a wine surplus generated from a significantly higher 2008 Marlborough grape harvest.
"While there is still a lot of uncertainty in the wine industry, directors are comfortable that the company's cash-based underlying earnings can bounce back in 2010 when Marlborough sauvignon blanc supply and demand comes back into balance," Mr Jamieson said.
The 2009 grape crush was completed, with the company harvesting 2478 tonnes of grapes from its company-owned and leased vineyards and contract growers.
That was in line with the 2009 budgeted intake and represented a 24 percent or 765 tonne decrease over last year's record crush of 3243 tonnes.
Chief executive Rob White said the company was close to matching its 2009 harvest intake with the level of global sales demand projected for its wines.
