August 14, 2019 / 11:26 PM / 2 months ago

CORRECTED-UPDATE 1-Australia's Treasury Wine misses FY profit estimates; sees higher capex

(Corrects paragraph 5 to show net profit rose 16.4% to A$419.5 million, not 15.4% to A$415.9 million)

Aug 15 (Reuters) - Australia’s Treasury Wine Estates Ltd , the world’s largest standalone winemaker, reported a lower-than-expected annual profit on Thursday, hit by higher finance costs, and said it expects capital expenditure to increase nearly five-fold in 2020.

The Melbourne-headquartered company said it expects growth capex of up to A$135 million ($91 million) in the year, compared with A$27.7 million in 2019.

The maker of Penfolds, Beringer and Wolf Blass has been boosting production of its mid-range and luxury products, while exiting less expensive commercial wine production.

The company said it plans to invest more in its French assets and continues to focus on its Australian luxury winemaking capacity.

Net profit after tax rose 16.4% to A$419.5 million in 2019 from a year earlier, but came in below the average analyst estimate of A$436.3 million, according to Refinitiv Eikon data.

Net finance costs increased 55.7% to A$52 million, driven by higher average borrowings.

The company said momentum in its U.S. brands is expected to return once the U.S.-China trade relationship improves.

The company’s Asia sales, which includes sales in China, rose 36.8%, while sales in the Americas climbed 17.9%.

The company maintained its 2020 pretax profit guidance range of 15% to 20% and declared a final dividend of 20 cents per share, higher than the 17 cents per share declared a year ago.

$1 = 1.4815 Australian dollars Reporting by Shreya Mariam Job in Bengaluru; Editing by Maju Samuel

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