Sydney, Aug 26: Australian wine and beer giant Foster's posted a 17.5 per cent fall in annual net profit today as one-off writedowns took the fizz out of positive beer sales. The company recorded a profit of 462.9 million dollars in the year to June, down from 560.9 million dollars in the previous year as one-off charges totalling 105.2 million dollars - including the closure of the Kent brewery in Sydney - hit the bottom line.

Foster's president and chief executive Ted Kunkel said the figures, when one-off items were stripped out, showed a solid underlying performance but warned markets remained challenging and results were likely to be flat in the current year. "Foster's business balance and premium brands have once again delivered solid underlying earnings growth, strong cashflows and improved returns on capital employed," Kunkel said.

He said 8.3 per cent growth in earnings in the second half was "particularly pleasing".

In a reversal of recent trends, Foster's beer business provided stronger growth than its wine operations, as tight margins and the stronger Australian dollar impacted on wine earnings. The cub Australian beer division delivered a 7.6 per cent increase in earnings of 463.1 million and the international beer business recorded a 25.5 per cent growth surge in earnings.

Bureau Report