Treasury Wine Estates says “uncertainty within the US and Asian markets” hasn’t hit its bottom line.

The announcement follows volatility in the TWE share price in recent months as a result of trade tensions between the US, China and Australia. 

TWE released a surprise update to the ASX on Thursday, confirmed it expects its earnings for the first half of 2018-2019 to be between $335million and $340million, versus the $332million identified as the market’s consensus forecast.

Its statutory profit results will be disclosed on February 14.

The company also stood by its full-year guidance for 25% growth in EBITS and said it was “very happy with the trading performance across all operating regions”.

Sean Sequeira, chief investment officer of Alleron Investment Management, told the Australian Financial Review that few companies in the market were able to match its growth track record.

“The market had to work out who they believed,” Sequeira said. “What we went back to was whether we believed in Michael Clarke [pictured above] and his ability to understand the market, and history shows he has been able to deliver what he says he will.

“Despite having ambitious targets, he has always delivered, and that gives us confidence he understands the market he is dealing in. Treasury has a strong strategy to focus on China, and a strategy to change the distribution model in the US. They’ve doubled margins over the last three or four years.”

Morgan Stanley noted in a report last month that the slowdown in Chinese wine sales was mostly due to a tightening of credit conditions rather than trade issues.

“Encouragingly, Treasury’s (China) in-store execution was very strong and contacts indicated that Treasury’s sales were far faster compared to market trends,” it said.

“The Australian category — while export data shows declines — is outperforming French imports https://www.drinksbulletin.com.au/files/which are running down 20%.” 

TWE will also benefit from Chinese import tariffs on wine dropping to 0% January 1 as part of the Free Trade Agreement between Australia and China.

By contrast, French and other imported wines currently have a 14% import tax imposed on them.

Australia ranks as China’s second biggest source for importehttps://www.drinksbulletin.com.au/files/d bottled wines with an export value of more than us$682 million in 2017, behind france’s US$1.05 billion, according to Chinese customs data.