Delegat's Group, the winemaker which last year bought Australia's Barossa Valley Estate, says first-half profit has fallen 7.6 per cent as sales fall in the UK and Europe, and costs rise.
Net profit was $NZ17.8 million ($A16.60 million) for the six months ended December 31, down from $NZ19.3m a year earlier, the company said on Thursday.
Sales slipped 1.8 per cent to $121m, although overall revenue rose to $NZ130m from $NZ129m, including fair value adjustments on biological assets and currency hedging.
The Auckland-based winemaker reported a record operating profit, which doesn't reflect fair value adjustments, of $NZ20.2m, up from $NZ19.2m.
Delegat's, which counts Oyster Bay among its brands, spent $NZ73.7m over the 2013 financial year on Kaituna Vineyard in Marlborough, Matariki Vineyard in Hawkes Bay, Barossa Valley Estate in South Australia, while expanding existing facilities.
The winemaker pitches its Oyster Bay and Barossa Valley Estate wines as super-premium brands and plans to spend a further $NZ132m over the next three years to support sales growth, especially in the North American market.
The company said global cases sales were down one per cent to 1.083 million sold in the first half, as a strong kiwi dollar impacted on income.
Sales in the UK, Ireland and Europe fell 14 per cent to 348,000 cases, while North American sales gained 15 per cent to 356,000 cases and Australia, New Zealand and Asia Pacific sales were unchanged at 379,000.
New Zealand sales for its Delegat's Wine Estate unit fell 9.1 per cent to $NZ106m. Oyster Bay Wines Australia dropped 13 per cent to $NZ36.5m, Delegat's Wines UK slipped 0.5 per cent to $NZ33.7m and Oyster Bay Wines USA sales grew 19 per cent to $NZ23.4m.
Expenses rose 8.3 per cent to $NZ49.96m, reflecting increases in administration, marketing and finance costs, it said.
The company affirmed guidance given at its December annual meeting for operating earnings to be $NZ29m for the full-year, up from $NZ26.3m a year earlier.
The shares were unchanged at $NZ3.80 and have gained 1.3 per cent this year.
