Winemaker Distell’s First-Half Profit Gains on More Cider Sales

Distell Group Ltd. (DST), South Africa’s biggest wine and spirit producer, said first-half earnings rose on higher sales of pre-mixed ready-to-drink brands and cider.

Net income advanced 13 percent to 877 million rand ($99 million) in the six months through December, the Stellenbosch, South Africa-based company said in a statement today. Sales increased 9 percent to 8.7 billion rand.

“Distell’s cider and ready-to-drink brands maintained their strong performance,” the winemaker said. “The company’s wine and spirits portfolios both showed a decrease in sales volumes.”

The economic climate made it “difficult to predict consumer spending trends” while drinkers’ “disposable income remains under severe pressure,” Distell added. Weaker consumer confidence has prompted several South African retailers to warn trading may come under pressure in the first half of 2013.

Distell, which sells Klipdrift brandy and Nederburg wines, said in January its farming operations weren’t disrupted by violent labor unrest in the Western Cape. Strikers demanded the minimum wage for farmworkers be increased to 150 rand a day from 69 rand. The government raised the wage to 105 rand earlier this month.

The company increased its interim dividend 6.3 percent to 1.52 rand.

To contact the reporter on this story: Jaco Visser in Johannesburg at avisser3@bloomberg.net

To contact the editor responsible for this story: John Viljoen at jviljoen@bloomberg.net

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