February 12, 2015 / 6:21 AM / 3 years ago

China weighs on Pernod Ricard H1 earnings

PARIS, Feb 12 (Reuters) - French spirits group Pernod Ricard on Thursday posted a flat first-half operating profit as a crackdown on extravagant spending in China and a struggling vodka market in the United States, its biggest market prevented earnings growth.

The world’s second-biggest spirits group behind Britain’s Diageo nevertheless said sales were gradually were gradually improving despite a still challengic economic climate, and it kept its annual profit growth outlook.

In China, the group’s second-largest market, sales still fell 16 percent in the first half and the upcoming Chinese New Year that starts on Feb. 19 will be key to confirming an “improving underlying trend”, the group said.

First-half sales reached 4.621 billion euros, an underlying rise of 1 percent, while underlying operating profit was flat at 1.358 billion euros.

This was broadly in line with analysts‘expectations of 4.658 billion euros in sales and 1.382 billion in operating profit in a company-compiled consensus.

The owner of Absolut vodka, Martell cognac and Jameson whiskey said it still eyed a rise of between 1 percent and 3 percent in underlying operating profit for the year ending June 30, 2015.

Reporting by Dominique Vidalon; Editing by Andrew Callus

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