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Foster's Group writes down wine assets

Foster's Group writes down wine assets

Foster's Group Ltd. said Tuesday its chief executive, Trevor O'Hoy, has resigned while the brewer and wine maker has written down the value of its global wine assets.
Foster's said it expects net profit before significant items for the year to June 30 to be between 700 million Australian dollars (US$666 million) and A$715 million (US$680 million).
It is also conducting a strategic review of its wine assets, to be overseen by Chairman David Crawford, it said in a statement.
The company expects to report a non-cash impairment charge of A$600 million (US$570 million) to A$700 million (US$666 million) to the carrying value of its global wine assets.
Foster's also expects to report a A$70 million (US$67 million) non-cash writedown of surplus Australian bulk wine inventories.
"Trading conditions have been tough and the continued strength of the Australian dollar has hit us hard," Crawford said in a statement.
O'Hoy has agreed to stay on to facilitate an orderly transition until the appointment of his successor.
Foster's bought Australian winemaker Southcorp in 2005 for A$3.7 billion (US$2.8 billion).
"The reality is we did not execute the Southcorp integration as well as we expected and operating conditions are now more challenging," Crawford said.
"We must also recognize and acknowledge that we paid too much to acquire wine assets," he added.
Crawford said the company had a great Australian beer business that continued to deliver strong returns.


Updated : 2020-11-30 07:31 GMT+08:00