Foster's Group Limited (Foster's) today announced the Beringer Blass Wine Estates (Beringer Blass) results for the 2002 California grape harvest intake, which totalled 133,287 tonnes (146,921 U.S. tons) including grapes the company grows, purchased grapes and purchased wine.
The 2002 intake, which equates to approximately 9.8 million 9-litre cases of wine, is 10% lower than the record 2001 intake of 148,234 tonnes (163,400 U.S. tons), due to a smaller crop size overall, deliberate crop thinning, as well as decreased bulk wine purchases.
Of the total intake, red grape varieties accounted for 40,386 tonnes (44,517 U.S. tons) while white varieties and red grapes grown for blush wines totalled 92,900 tonnes (102,404 U.S. tons).
Jim Watkins, Beringer Blass' President, Americas said, "We are pleased with this year's harvest results. Although the industry's crop volume appears to be lower than originally estimated, we anticipate this decrease will bring the industry as a whole into more balance in terms of supply and demand.
At the same time, through inventory management and the relatively large 2000 and 2001 harvests, we are confident that Beringer Blass has adequate supply to meet the company's projected needs and growth plans."
According to Bob Steinhauer, Beringer Senior Vice President, Vineyard Operations, the 2002 harvest appears to be exceptional in terms of quality. "Once again, our California coastal vineyards experienced an ideal growing season, with a relatively cool summer capped by a warm and rain-free harvest. The smaller crop size, along with the deliberate thinning we did in many of our vineyards, has produced fruit of great intensity in colour, aroma and flavour."
As a result of the lower than anticipated northern hemisphere grape harvest intake in the US for 2002, Foster's also announced that the Self-Generating and Re-Generating Assets (SGARA) contribution to EBITA for the full year result is now expected to be around $5 million. This compares with the group's previous estimate for the SGARA contribution to EBITA of $23.5 million announced at the Company's full year results in August 2002.
However, due to the diverse geographies of the Beringer Blass vineyards, the final SGARA EBITA contribution in fiscal 2003 will not be known until completion of the southern hemisphere grape harvest in the second half of the fiscal year.
SGARA does not impact Foster's cashflow or the group's normalised earnings per share (EPS).
The treatment for SGARA is required by an Australian accounting standard which recognises and accounts in the Profit and Loss for the difference between the actual cost of production and the market value of the group's own-grown grape crop.
The impact of this standard is that unrealised profits or losses are reported as part of the Beringer Blass financial result. In order to more accurately reflect the performance of the underlying business, Beringer Blass reports EBITA on a pre and post SGARA basis.
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Nicole Devlin
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