Treasury Wine Estates has reported a staggering $649.4 million net loss for the half year ending December 2025, driven by significant impairments on US assets and a drop in revenue. The company has suspended its interim dividend and unveiled a new Luxury-led operating model as it navigates these challenges.
- Half-year net loss of $649.4 million, reversing prior profit
- Revenue down 16.6% to $1.31 billion due to reduced shipments and portfolio mix
- Non-cash impairment charge of $751 million primarily on US assets
- Management earnings before interest, tax, SGARA and material items (EBITS) fell 39.6%
- Dividend suspended as Board focuses on restructuring and market recovery
A Sharp Turn in Treasury Wine Estates’ Fortunes
Treasury Wine Estates Limited (ASX, TWE), one of Australia’s leading wine producers, has revealed a dramatic financial reversal in its interim results for the half year ended 31 December 2025. The company reported a net loss after tax attributable to shareholders of $649.4 million, a stark contrast to the $220.9 million profit recorded in the same period last year.
This downturn was driven largely by a significant non-cash impairment charge of $751 million, primarily related to the company’s US-based assets. The writedown reflects a reassessment of the recoverable value of these assets amid a moderation in US market trends and revised long-term growth expectations.
Revenue and Earnings Under Pressure
Revenue for the half year fell 16.6% to $1.31 billion, impacted by reduced shipments across all divisions and an adverse portfolio mix, particularly within the iconic Penfolds brand. Net sales revenue per case declined by 5.8% on a constant currency basis, while cost of goods sold per case also decreased slightly, reflecting portfolio adjustments.
Management earnings before interest, tax, SGARA (the accounting for agricultural produce) and material items (EBITS) dropped 39.6% to $236.4 million, with the EBITS margin contracting by 7.2 percentage points to 18.2%. The company’s cost of doing business increased by 3.5%, driven by brand investment and higher overheads following the transition to a new Luxury-led operating model.
Strategic Shifts and Dividend Suspension
In response to these challenges, Treasury Wine Estates has restructured its divisional operating model to focus on luxury brands, splitting its Americas business into Treasury Americas and Treasury Collective – Americas segments. This strategic pivot aims to better align resources and management focus with market realities.
Reflecting the financial strain, the Board has suspended the interim dividend for the half year ended 31 December 2025, a notable move given the 20 cents per share dividend paid in the prior period. The company remains committed to maintaining liquidity and meeting its debt covenants, supported by a recent settlement with Republic National Distributing Company (RNDC) following the closure of RNDC’s California operations.
Looking Ahead
Despite the significant impairment and earnings decline, Treasury Wine Estates continues to hold a strong asset base, with net tangible assets per share slightly increased to $3.24. The company’s management and Board face the critical task of executing the new operating model and navigating the evolving global wine market to restore profitability and investor confidence.
Bottom Line?
Treasury Wine Estates’ next steps in executing its luxury-focused strategy and managing US market headwinds will be pivotal for its recovery and shareholder returns.
Questions in the middle?
- How will Treasury Wine Estates’ new Luxury-led operating model translate into improved financial performance?
- What are the long-term implications of the US asset impairments on the company’s global market positioning?
- When might investors expect the resumption of dividend payments given current financial pressures?