Treasury Wine downgrades profit guidance again as virus takes toll

Australia's biggest wine company has downgraded its profit guidance for a second time this year, confirming for the first time that the coronavirus was having a significant impact on its Chinese business.

In a statement to the ASX, Treasury said its staff in China had not been able to return to work because of infection containment controls and were still working from home.

While the full operating and financial impacts of the coronavirus outbreak were not yet known, the company was aware that "consumption across discretionary categories in China has been significantly impacted through February, and that this impact on consumption is expected to be sustained to at least through March," the company told the ASX on Tuesday afternoon.

Penfolds owner Treasury Wine Estates has downgraded its profit guidance due to the coronavirus.Credit:Photo: Justin McManus

"As a result, TWE no longer believes that it will achieve the previously provided guidance for fiscal 2020 reported EBITS (earnings before interest, tax and the accounting treatment SGARA) growth of between 5 per cent and 10 per cent," Treasury said.

Treasury also said that while the virus may affect performance in other markets outside of China, "at this stage this is not expected to have a material impact".

In late January Treasury told the market it expected growth in reported EBITS (earnings before interest, tax and an agricultural accounting standard) for 2019-20 of between 5 and 10 per cent, down from its earlier guidance of 15 to 20 per cent.

The wine giant is the owner of major labels including Penfolds and Wolf Blass.

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