By Tejaswi Marthi

(Reuters] Treasure Wine Estates reported Wednesday that it saw 28% growth in operating profits outside China. The increase was driven by the company’s luxury and premium brands. That resulted in shares of the biggest standalone winemaker almost 12% higher.

Treasury was forced to redirect supplies to Europe, the United States, and the domestic market after the Chinese government closed down the lucrative Chinese wine market.

Company reported strong growth in Americas, premium brands and materials businesses. These two areas saw a 19% increase of earnings before tax, SGARA (and interest), respectively.

The company released a statement saying that Penfolds’ growth in Asia was especially strong, excluding Mainland China. “Increasing distribution in Asia and domestic markets was a key execution highlight,” it said.

Reported EBITS, which exclude Australian COO wine, rose to A$262.4million (187.7 million), slightly missing the market’s expectations of A$265 millions, and its net profit dropped 7.5%, to A$109.1million.

Company stated that trading conditions are likely to continue in line with first-half levels across all key markets, channels and countries.

Citi analysts stated that FY22 could be a little less than expected, but they see Treasury building demand in new markets.

In early trading, Treasury shares rose as high as 11.8% to A$11.78 while the wider market increased 0.4%.

To partially offset the effects of higher supply chain costs, and logistical logistics, the company stated that it will increase prices for select brands in its portfolio.

Melbourne-based company retained 15 Australian cents per share as interim dividend.

($1 = 1.3986 Australian dollars)