Treasury Wine Estates has recorded a net profit after tax (NPAT) drop of 43 per cent to $120.9 million and cut its first half dividend from 20 cents to 15 cents per share.
Ongoing impacts from COVID-19 continued to disrupt sales channels, particularly for higher margin luxury wines. But it was reduced shipments to China due to anti-dumping and countervailing investigations by the Chinese Ministry of Commerce that hit hard.
TWE profits in its Asia division fell 28 per cent to $127.2 million. CEO Tim Ford said it expects demand to remain extremely limited while the provisional measures are in place.
Ford said it had been a time of "significant disruption" but the company was well placed for recovery in key luxury wine channels once conditions improve.
All channels experienced decline: Americas, 15 per cent; Australia/New Zealand: 12 per cent; and EMEA: 22 per cent. The Americas have been affected by COVID-19 restrictions and Californian fires. ANZ reflected the ongoing impact of restrictions, while EMEA was impacted by higher cost of goods sold (COGS) and cost of doing business (CODBs), included Brexit-related costs.
Ford also announced the proposed de-merger of Penfolds was on hold. Instead, there would be an operational restructure across brand portfolios rather than regions. From FY22, TWE will have three divisions: Penfolds; Treasury Premium Brands; and Treasury Americas.
While each would have unique characteristics, all will be serviced by centralised business, supply and corporate functions.
The company is still offloading a significant portion of its US commercial brand portfolio and reviewing other non-priority brands, operating assets and leases. It expects around $300 million from the divestments.
Retail and ecommerce channels continued to perform at elevated levels across all markets, TWE said, reflecting the COVID-19 driven shift to in-home consumption.