The company, which is searching for a new chief executive, said it expects the beer market to remain resilient this financial year.
But it would not provide earnings guidance for 2008/09, as it continues to work on a strategic review of the wine operations.
Foster's net profit for the year to June 30 was $111.7 million, down from $966.2 million in the previous year, reflecting the impact of $730.4 million in charges related to the wine business.
Its net profit before significant items and self-generating and regenerating assets (SGARA) was $713.2 million, down 0.4 per cent.
The full year net result was affected by two impairment charges of $437.7 million on the carrying values of wine in the Americas, and $292.7 million on its Australia, Asia and Pacific wine carrying values.
"Overall wine performance has not been acceptable," acting chief executive Ian Johnston said in a telephone conference.
"Beer remains the backbone of the Foster's business (and) despite the things we've done to shoot ourselves in the foot, we're still holding our share and we've still got fantastic brands."
Shares in Foster's gained eight cents, or 1.5 per cent, to close at $5.41, the highest since June 17.
Foster's has admitted it paid too much to acquire wine assets, following the $2.6 billion acquisition of Beringer in the US in 2000 and the $3.2 billion acquisition of Southcorp in Australia in 2005.
The company flagged writedowns on its underperforming wine assets in June and announced the resignation of chief executive Trevor O'Hoy.
It is now reviewing the wine operations, due to be completed by the end of calendar 2008, which could lead to asset sales.
Revenue for the year to June fell 4.2 per cent to $4.56 billion as the rising Australian dollar and the economic conditions hurt wine sales in the US.
On a constant currency basis global wine EBIT declined 1.8 per cent to $392.7 million, with the lower earnings in the Americas nullifying the growth in Australia, Asian and the Pacific, and Europe, Middle East and Africa.
Unfavourable exchange rate movements reduced global wine EBIT by about $70 million .
"We've faced a number of challenges in wine, not least the impact currency moves and the volatility in the industry," Johnston said.
Wine sales in the US fell 19.5 per cent to $676.2 million.
During the year, beer, cider and spirits in the Australia, Asia and Pacific (AAP) region, the company's biggest division, performed strongly with earnings before interest and tax (EBIT) up eight per cent.
"our market leading beer business remains a powerhouse," Johnston said.
Foster's sells seven of Australia's top 10 beer brands, including VB, and its Australia, Asia and Pacific operation represents about 70 per cent of group earnings.
The company said free cashflow after dividends increased 52.1 per cent to $433.9 million and net debt declined 6.5 per cent to $2.4 billion for a gearing of 62.4 per cent.
"Foster's strong balance sheet and outstanding cashflows are a highlight," Johnston said.
The company said the search for a new chief executive is progressing according to plan.
Foster's declared a final dividend of 14.25 cents, taking the total for the year to 26.25 cents fully franked, compared with 23.75 cents for 2006/07.
