MELBOURNE: Foster's Group Ltd , Australia's biggest alcoholic drinks company, posted its slowest growth in first-half net profit in several years on Tuesday, as U. S. Wine demand slowed and the strong dollar crimped earnings. Foster's, the world s second-largest wine company, said net profit before one-offs for the six months to Dec. 31 rose 6 percent to A$393.5 million ($361 million) from A$371.4 million, helped by a strong performance in Australia and Europe.

That beat market forecasts of A$384.5 million before one-offs, according to a Reuters survey of eight analysts, but was well below the the double-digit pace of recent years and the 22 percent rise in the six months to June 2007. Net profit after tax and including items fell 28 percent to A$398.6 million. Foster s said Australian beer, wine and spirits earnings before interest and tax increased 9.4 percent to A$433.4 million, including a one-off gain of A$17.8 million on the sale of properties.

Earnings before interest and tax in the United States slumped by 32.2 percent to A$98.3 million, hurt by softer sales for Australian wine, increased input costs and a high Australian dollar that reduced earnings translated into local currency. In constant currency terms, earnings fell 11.9 percent. Foster s U. S. Wine business, which is ranked only behind Constellation Brands Inc , is facing a slowdown in consumer spending and it said wine sales slowed sharply in November and December.

December quarter retail sales of Foster s wines were significantly lower than expected, the company said in a statement. In Australia, Foster s mainstream beers have come under pressure as consumers switch to higher-margin premium beers.

Foster's has a 50 percent share of Australia s beer market duopoly, but smaller rival Lion Nathan Ltd , which has a 42 percent share, has benefited from a focus on higher-margin premium beers, where total industry sales have jumped 12 percent. Foster s shares have fallen 10 percent this year compared with 12 percent for the broader market <. AXJO>. They fell 5.3 percent last year when the market rallied 11.8 percent.

Source : UNI