AVL details extent of vintage yield declines
Australian Vintage Limited (AVL) has detailed the extent to which the crush and yield numbers from its 2019 vintage are down of those from the previous year.
And while CEO Neil McGuigan has detailed the significant impact the weather has had on the amount of wine the company will make, he did say that early indications are that the quality is “exceptional”.
“This year’s vintage has been significantly impacted by the frost that occurred in some of our vineyards late last year and the extreme heat in January and February this year,” McGuigan said.
“In the Adelaide Hills our vineyard yields were down 51 per cent and, in the Barossa, they were down 48 per cent. In the irrigated regions total yields were down 17 per cent against last year and 25 per cent against expectation.
“Whilst our contract processed tonnes were up by 3500 tonnes to 7600 tonnes, they were well short of the contract tonnes of 15,700. Third party grower tonnes were down 24 per cent or 8500 tonnes.
“The overall negative impact from the significant decline in grape yield on SGARA (Self Generating and Regenerating Assets) income is about $4.4m against last year and $6.5m against expectation.
“At this stage it appears that the 2019 Australian wine industry crush is estimated to be at least 20 per cent down on the 2018 crush. Whilst yields are down the early indications are that the quality is exceptional.”
In total AVL crushed 83,000 tonnes of grapes from the 2019 vintage, compared to 93,000 tonnes last year and an expected crush of 114,000 tonnes. In total grape yields from owned and leased vineyards were down on last year by 18 per cent and down 22 per cent on expectation.
While the vintage numbers were not great for AVL, McGuigan did say that trading-wise the company was performing well.
“Our core business is performing well with UK/Europe sales to the end of March up 19 per cent and Australasia/North America sales are up five per cent,” he said. Our branded business continues to grow with sales of our three key brands, McGuigan, Tempus Two and Nepenthe up 11 per cent on last year, and together with an improved sales mix, our core business has improved significantly.
“Unfortunately, the frost and extreme weather conditions have resulted in lower yields from our vineyards which, this year, will erode the benefits from the improved core business.”
Looking at the full financial year, McGuigan added: “For the full year and assuming no material movement in the exchange rates, we expect our Net Profit after tax and before SGARA to be up between 35 per cent and 40 per cent on last year. After the impact of SGARA we are expecting our Net Profit after tax to be in line with the previous year.”