Viña Concha y Toro S A : Viña Concha y Toro reports first-quarter results

The company activated a savings and efficiency plan, which, together with the moderation of the complex global conditions and normalization of inventories, allow us to foresee a rebound in the second half of the year.

Viña Concha y Toro reported an 82.2% decrease in net income in the first quarter of 2023 and an 8.4% drop in revenue, due to the ongoing complex global situation marked by inflationary pressures, excess inventory, economic slowdown, higher interest rates, cost increases for dry goods and shipping, and lower consumption.

"This has affected our business, which can be clearly observed in the higher level of accumulated inventory in our markets, resulting from lower sales in terms of both volume and value. As such, our performance in this period was not in line with our forecasts", explained Eduardo Guilisasti, CEO of Viña Concha y Toro.

In response to this scenario, in the fourth quarter of 2022 the company initiated a comprehensive savings and adjustment plan which aims to increase efficiency throughout the holding's operations. Additionally, price increases were implemented throughout the portfolio during 2022, which helped to partially offset higher costs.

"Our most conservative forecasts lead us to expect an improvement in sales during the second half of the year, to the extent that the extraordinary global conditions that have affected the industry-such as the cost of shipping and dry goods-begin to recede and the measures taken by the company start to bear fruit. As such, we expect to exceed the volumes sold in 2022", said Guilisasti.

In fact, the executive noted that expenses attributable to these extraordinary conditions, such as shipping rates and others, will decrease by around half in 2023 compared to 2022, resulting in a Ch$13,000 million reduction in spending from the second half of this year.

"Over the last five years, during which the company has implemented a premiumization and transformation strategy ending in 2022, we have achieved a more efficient and agile operation with a more premium product portfolio", highlighted Guilisasti.

"In the coming months, we will launch a new ambitious strategic plan 2023-2025, which aims to accelerate the recovery of sales from 2023 and achieve high and sustained medium-term growth. We are convinced that we have laid all the necessary foundations to undertake this new challenge and take Viña Concha y Toro to the next level", he concluded.