Pernod Ricard profits up on strong Chinese cognac demand
Pernod Ricard, whose Chivas Bros subsidiary is Scotland's second-biggest Scotch whisky business, has outstripped first-half earnings forecasts helped by strong cognac shipments to China ahead of the Chinese New Year in January.
The group said Chinese sales rose 4 per cent in the six months to end-December, up from 1 per cent growth in the first quarter, with sales of Martell cognac up 10 per cent and 7 per cent globally.
Luxury cognac brand Cordon Bleu also showed some recovery, but Scotch whisky sales continued to suffer amid the clampdown by the Chinese government on extravagant spending.
Pernod Ricard said sales growth in India, one of its key markets, slowed to 3 per cent in the first half as an Indian government ban on high-value banknotes held back local whisky consumption.
Group profits rose 4 per cent to €1.5 billion (£1.28bn) on sales also up 4 per cent at 5.06bn euros. Pernod said it was keeping its guidance of a rise of 2 to 4 per cent in annual profits for the year to end-June 2017.
“We are not changing our guidance despite this headwind in India which is offset by a better than expected performance in China,” Alexandre Ricard, group chief executive, commented.
In the United States, where Pernod’s sales lifted 5 per cent, Jameson Irish whiskey, continued to grow at a double-digit rate and 20 per cent worldwide.
Ballantine’s Scotch whisky sales climbed 6 per cent, but the Chivas Regal brand dipped 1 per cent and The Glenlivet malt whisky revenues were flat.