CANADA: Magnotta Winery earnings up

The Magnotta Winery has reported a 2.4% net earnings increase for the first nine months of the year, but warned of rising costs.

Net earnings rose to C$2.6m (US$2.1m) for the period ended 31 October, the Canada-based winery said yesterday (15 December).

Net sales for the nine month period increased 2.2% to $19.2m.

The growth was from increased volumes, through a continued emphasis on branding supported by marketing campaigns, the group said.

The company also sold more of its Chilean grapes to third parties in fiscal 2009 versus fiscal 2008 as it was able to negotiate higher prices for its grapes.

Overall gross profit margin decreased to 49%, from 49.6% for the first nine months of 2007. This change was due to increased cost pressures from raw and packaging materials, energy costs, and higher Ontario grape prices.

The recent weakening of the Canadian dollar against the US dollar resulted in increased costs as raw inputs became more expensive, the company said.