Penfolds depletions in China rose 34.7 percent, and Treasury Wine says about half of that growth rate came from redirecting parallel imports into authorised channels

The growth number in Treasury Wine's results is real, and about half of it is a change in where the wine is sold rather than in how much of it is drunk.

Penfolds depletions rose globally in the year to 30 June, led by China at 34.7 percent, Asia excluding China at 18.1 percent and Australia at 5.7 percent. The announcement gives three causes for the China figure: strong consumer demand, improved performance in the fourth quarter, and action to divert parallel imports to authorised distribution channels. It then says the last of those contributed approximately half of the depletion growth rate. Parallel imports are the company's own wine reaching the market outside its authorised channels, so redirecting them moves volume onto the books without adding a drinker.

Net sales revenue for Penfolds fell 7.0 percent even so.

The loss

Statutory net profit after tax was a loss of $1,078.7m, on post-tax material items of $1,308.7m. The largest single piece is an incremental $558.4m recognised in the second half: a non-cash write-down of United States property, plant, equipment and inventory, together with a further impairment of brands. It follows the decision announced on 10 August to reduce United States vintage makes from 2026.

Earnings before interest, tax, SGARA and material items came in at $492.3m. That is above the guidance range of $480m to $490m and 36.1 percent below last year, which is the shape of this result in one line. Group net sales revenue fell 12.8 percent to $2,561.0m.

Treasury Americas took the worst of it. EBITS there fell 61.4 percent to $90.2m and the margin fell 16.3 percentage points to 15.7 percent, on net sales revenue down 21.2 percent. In the second half the company repurchased California inventory from its distributor RNDC, roughly 40 percent of which it had sold by the end of the period at effectively nil margin.

What the company says happens next

Leverage of 2.8 times is expected to be the peak, with a return to the target of below 2.0 times by the end of F28, funded by free cash flow, divestment proceeds and, from F28, earnings improvement. The Ascent program moves to a regional operating model on 1 October 2026 and targets $100m a year of cost reduction in full by F29, of which about $40m is expected in F27. Advisers have been appointed to the Americas review, which covers the brand portfolio, the operating model and the asset base.

F27 EBITS are expected to be at least equivalent to F26, weighted about 55 percent to the second half.