Vina Concha y Toro Reports Fourth Quarter and Year 2009 Results

USA - English

• USA - English
• USA - English
• USA - English

SANTIAGO, Chile, Feb. 25 /PRNewswire-FirstCall/ -- Vina Concha y Toro S.A. (NYSE: VCO), Chile's largest producer and exporter of premium wines, reports results for the fourth quarter and year 2009, ended December 31.

Commenting on the annual results, Company CEO Eduardo Guilisasti said, "The global wine industry in 2009 was heavily affected by a global economic deceleration which led to a sharp adjustment in consumption. The 12.3% sales growth that Vina Concha y Toro showed in this scenario and the 28.6% rise in net income are therefore highly satisfactory and show the strength of our business model and our team's great capacity to respond quickly to the large challenges faced at the commercial level."

Fourth Quarter 2009

-- Net income for the quarter increased 40.7% to Ch$ 9,848 million (US$ 19.4 million). Earnings per ADR increased 67.4% to US$ 0.52 for the quarter.

-- For the quarter, total revenues increased 5.8% to Ch$ 93,939 million (US$ 185 million), following an increase in both domestic and export volumes, partly offset by the impact of the unfavorable exchange rates.

-- Export sales in the quarter rose 3.1%, with a 13.8% increase in volume. Higher volume contribution was partly offset by the exchange rate effects as the Chilean peso appreciated against all the main export currencies in the quarter.

-- Domestic market sales increased 9.7% in the quarter, following a 3.6% increase in volume. This result has enabled the Company to increase its market share to 31.5% of all wine sold in Chile.

-- Operating income decreased 21% to Ch$ 9,944 million (US$ 19.6 million) in the fourth quarter 2009. This lower result reflects mainly the impacts of the unfavorable exchange rate effects that offset the higher export volume contribution and in addition, by a one-time write-off of Ch$928 (US$ 1.8 million) in wine inventories associated with the change of the mix evidenced during the year.

-- For the quarter, non-operating results presented a gain of Ch$ 2,166 million (US$ 4.3 million). This positive result is mainly explained by a gain obtained in exchange rate differences related to forward positions taken by the company as part of its exchange-rate hedging and fixing strategy related to its exports and also due to lower financial expenses as a result of a lower financial debt.

Year 2009

-- Net income for the year increased 28.6% to Ch$ 44,160 million (US$ 87 million). Earnings per ADR increased 52.9% to US$ 2.35 for the year.

-- Total revenues increased 12.3% to Ch$ 353,595 million (US$ 697 million), growth was led by an increase in export sales and a good performance in Chile for both wine and other products, the latter resulting from new businesses.

-- Operating income posted an 11% decline, mainly reflecting the change in the sales mix following the economic downturn in key markets, the impact of a higher direct cost (impacting the first half of the year), and an extraordinary cost related to a write-off of Ch$ 1,658 million (US$ 3.3 million) in wine inventories.

-- Full year, non-operating results presented a gain of Ch$ 8,259 million (US$ 16.3 million), mainly explained by a gain obtained in exchange rate differences related to forward positions taken by the company.

    Financial Highlights
    (in millions of Chilean pesos as of December 31, 2009,
    except percentages and per share amounts)

                          4Q2009    4Q2008   Change     2009     2008   Change

    Revenue from sales    93,939    88,798    5.8%   353,595  314,756    12.3%
    Gross Profit          32,550    35,322   -7.8%   128,951  125,608     2.7%
    % sales                34.6%     39.8%             36.5%    39.9%
    Selling &
     Administrative
     Expenses            -22,605   -22,729   -0.5%   -84,343  -75,506    11.7%
    % sales                24.1%     25.6%             23.9%             24.0%
    Operating Income       9,944    12,593  -21.0%    44,607   50,102   -11.0%
    % sales                10.6%     14.2%             12.6%    15.9%
    Non-Operating result   2,166    -3,784 -157.3%     8,259   -6,867  -220.3%

    Net Income             9,848     6,998   40.7%    44,160   34,343    28.6%

    Earnings per
     share (Ch$)           13.28      9.73   36.5%     59.56    47.75    24.7%
    Earnings per
     ADR (US$)              0.52      0.31   67.4%      2.35     1.54    52.9%

    EBITDA                14,191    16,694  -15.0%    59,396   64,079    -7.3%
    % sales                15.1%     18.8%             16.8%    20.4%

SOURCE Vina Concha y Toro S.A.