Why MWE wine’s monthly sales figures are hitting a new high?

Summary

  • MWE Wine sales hit new monthly records.
  • Reports 26% jump in net profit and 19% growth in revenues.
  • Wine industry expects increase in demand for Sauvignon Blanc globally.

Kiwi wine makers reaped rich rewards as drinking at home during COVID-19 pandemic became a growing trend in NZ.

Auckland-based Marlborough Wine Estates Group Limited (NZX:MWE) also benefited from that and reported a spectacular jump in its sales of bottled wine in the first half of FY2021.

Even though the NZ wine market had shown a slump in August 2020, in the subsequent months, particularly from October, the Company started setting new monthly sales records. While international demand also grew, MWE, in its home country, expanded its market share in South Island and grew revenues in North Island.

Half year of FY21 proves good for wine sales

In the first half of 2021, MWE revealed a 26.2% jump in net profits over the same period last year. Through the growth in sales of bottled wine in New Zealand, its revenue increased by 19%.

Due to COVID-19, the NZ market had slowed down in August but in the subsequent months, particularly from October, the Company started setting new monthly sales records. In the home country, the company expanded its market share in South Island while also grew its revenues in North Island.

Despite the COVID-19 global restrictions, the Company transported its first major orders to countries like Canada, Malaysia, and Singapore, and continued to receive orders from its existing markets like Taiwan, Japan, and Finland. However, the international sales were impacted as currently, its sales in some key countries was limited to fine wine retail.

Related Read: Marlborough Wine (NZX:MWE) Half-year results confirm steady brand building

Bulk grape sales numbers in HY2

Bulk grape sales, which is a business segment for MWE, depends on seasonality as the grape harvests occur only between March and April. The revenues and profits generated from the bulk grape sales will be factored in in the second-half results.

The gross profit MWE generated in HY21 is mostly unchanged compared to HY20. The growth in sales and marketing led to an increase in operating costs in HY20. The increase in operating costs was on account of establishing a new market in South Islands and launching its products there.

Even though the launch led to revenue growth, for the future, MWE will focus on optimising the investment in the second half in the new market.

Also Read: Take a Peek at NZ Wine Industry and Related Stocks- DGL, FWL, MWE

MWE focused on bottled wine sales for the future

For the future, the industry is expecting a strong year in terms of pricing of the brand Sauvignon Blanc due to its demand the world over. So, a good vintage is important.

MWE in particular expects to grow further in its bottled wine sales and will remain focused on that.

Last year, MWE also appointed two people in leadership positions. With these people at the helm, MWE is hoping that it would be able to introduce new wines, as improved wine quality, corporate strategy, and governance, are key to the next stage of the Company’s growth initiatives.

Also Read: Why did Marlborough Wine Estates (NZX:MWE) ended 8% up on NZX today?


Disclaimer
The website https://kalkinemedia.com/nz is a service of Kalkine Media New Zealand Limited (Kalkine Media), Company Number: 8107196. The principal purpose of the content on this website is to provide factual information only and does not contain or imply any recommendation or opinion intended to influence your financial decisions and must not be relied upon by you as such. Some of the content on this website may be sponsored/non-sponsored, as applicable, but is NOT a solicitation or recommendation to buy, sell or hold the stock of the company (or companies) or engage in any investment activity under discussion. We are neither licensed nor qualified to provide investment advice through this platform. In providing you with the content on this website, we have not considered your objectives, financial situation or needs. You should make your own enquiries and obtain your own independent advice prior to making any financial decisions.
Some of the images that may be used on this website are copyright to their respective owner(s). Kalkine Media does not claim ownership of any of the pictures displayed on this website unless stated otherwise. The images that may be used on this website are taken from various sources on the web and are believed to be in public domain. We have used reasonable efforts to accredit the source (public domain/CC0 status) to where it was found and indicated it below the image. The information provided on the website is in good faith, however Kalkine Media does not make any representation or warranty regarding the content, accuracy, or use of the content on the website.
   
We use cookies to ensure that we give you the best experience on our website. If you continue to use this site we will assume that you are happy with it. OK