Australia's Foster's H2 profit falls 9.2 percent

Foster's Group Ltd (FGL.AX: Quote, Profile, Research, Stock Buzz), Australia's largest brewer, posted a 9.4 percent decline in second-half profit on Tuesday, pressured by disappointing sales from its Californian wine business.

Foster's cut its profit outlook in June as it began a review of the underperforming wine business, the world's second largest with brands such as Beringer, Rosemount and Penfolds.

The review could lead to the sale of some brands or vineyards or a separate stock market listing, but analysts say the entire business, worth up to A$5 billion, is unlikely to find a single buyer because of an oversupply of wine assets on the market.

Rival Constellation Brands (STZ.N: Quote, Profile, Research, Stock Buzz) recently wrote down the value of its Australian wine assets and put some brands up for sale.

Foster's second-half net profit before one-offs including writedowns on the wine business fell to A$319.7 million ($276 million) from A$353 million a year ago, based on Reuters calculations from full-year figures provided by the company.

That was slightly above forecasts of A$310.9 million excluding wine writedowns, according to a Reuters Estimates survey of nine analysts.

Foster's said net sales of wine in the Americas fell 8.9 percent in constant currency terms, hit by a slowdown in consumer spending and a change in distributor inventories.

It gave no update on progress of its wine review, saying it will report by the end of 2008.

Full-year net profit before one-off items slipped to A$713.2 million from A$716.1 million a year ago, above analyst forecasts of A$704.4 million.  Continued...