The Adelaide-headquartered company, which also produces major brands in NSW, yesterday reported a vintage 2021 grape crush of 116,600 tonnes, up from 101,400 last year.
This was boosted by an 11 per cent increase in grape yields from its own vineyards.
However, in its statement to the ASX, the company said the tariffs that had effectively brought an end to Australian wine exports to China had impacted red grape prices, resulting in a drop from $770 per tonne to $530.
CEO Craig Garvin said favourable seasonal conditions had led to a very high quality and improved yields this vintage, which was completed earlier this month.
“In the premium regions our vineyard yield was up 97 per cent with both the Adelaide Hills and the Barossa vineyards recovering well from the fires and drought experienced in the prior vintage,” he said.
Sales of wine from Australian Vintage’s pillar brands Nepenthe, McGuigan, Barossa Valley Wine Company and Tempus Two are up 17 per cent on last year.
The company has been impacted following the imposition of Chinese tariffs of up to 206 per cent on Australian wine in November. But China only accounted for a relatively small portion of revenue with the UK and Australia AVL’s biggest markets.
“The UK/Europe/Americas segment performance continues to grow with sales increasing at 12 per cent despite unfavourable exchange rates compared to prior year,” Garvin said.
“Our Australian and New Zealand segment sales have also performed well with bottled sales to the end of March up 9 per cent.
“As expected, sales to Asia have declined and at the end of March total sales are down 18 per cent against the prior period. Sales to China are down 88 per cent from a relatively low base but sales to other Asia have improved by 11 per cent.”
The company says it is on target to achieve a financial year profit between $18.2 and $19.2 million, up about 70 per cent on the previous year, provided there are no material changes to exchange rates between now and the end of June.
Garvin said Australian Vintage Limited was in a sound position for continued growth, which included increased product distribution in the UK and Australia.
“We continue to have discussions with our China distributor with the hope that our sales into China will resume in the medium term,” he said.
“Both our Asian and North American business will play a strategic role long term to build upon our growing UK and Australian business.”
In February, AVL reported a 127 per cent increase in net profit for the first half of the financial year to $13.3 million.
This saw the company’s share price surge to its highest level since 2008, opening this morning at $0.74.
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