Australian brewer Foster’s Group Ltd
(ASX:FGL) says earnings from its wine business are likely to fall below the company’s expectations for the first half due to unfavourable exchange rate movements and US market conditions.
The company says unfavourable exchange rate movements are expected to negatively impact first half wine earnings by between $80 million and $90 million.
Foster’s says the major currency impacts are expected to be an approximate nine cents in the average USD and an eight pence increase in the average pound sterling exchange rates compared to the prior period.
The company says recessionary conditions remain challenging and are resulting in lower volume and net sales revenue.
In Australia and New Zealand wine sales continue to be impacted by oversupply with volume declines in commercial wines partially offset by growth in premium wines.
Foster’s Group’s 2009 net profit came to $438.3 million.
