Delegat signals flat profit, warns of shipping issues

14th July 2021 By Staff Reporter | news@foodticker.co.nz | @foodtickernz

Delegat Group has released strong unaudited numbers for its 2021 fiscal year but warned the official numbers are likely to be lower when they come out in late August.

New Zealand’s largest listed wine group, which counts Oyster Bay and Barossa Valley Estate among its brands, said in an announcement to the NZX on Tuesday that its unaudited operating net profit after tax was $64.6m for the 12 months ending 30 June 2021, up 6% on the previous year.

However, Delegat said that it could fall to between $57m-$61m when it reports next month.

“This is lower than this year’s unaudited result due to impact of the lower yielding 2021 vintage and higher grape prices resulting in an increased cost of goods per case, unfavourable exchange rate movements, higher freight costs and recurrence of operating expenses suspended due to Covid-19 restrictions,” the company said.

If it hits the upper end of this guidance it will scrape in close to last year’s record net profit of $60.8m.

The Auckland-headquartered business added that its unaudited IFRS reported profit after tax was $62.3m, down 3% on last year when IFRS fair value adjustments added $3.3m to the total. In contrast, Delegat said that this year’s adjustments reduced profit by $2.3m.

The group said the profit result was achieved from global case sales of 3,178,000 cases for the year, which was down 3% on last year and 6% lower than previous guidance.

“Case sales are lower than guidance due to the impact of ongoing global port congestion compounded by constrained shipping line capacity on all major trade lanes, coinciding with New Zealand’s peak export season,” the company said.

For 2022, the group stuck with its case sales guidance provided in April after it had concluded the 2021 harvest, when it revised numbers to 3,419,000 cases in FY2022 and 3,783,000 cases in FY2023.