Guinness maker Diageo profits soar on emerging market demand
Diageo, the world's biggest producer of alcoholic drinks, said Thursday its annual net profit jumped nearly 17 percent, as rapid emerging markets growth offset weak demand in Europe and North America.
Profits after tax rallied to £1.9 billion (2.15 billion euros, $3.11 billion) in the group's 2010-11 financial year to June, Diageo said in a results statement. That just beat market expectations for £1.94 billion.
The British brewing giant, which makes Guinness stout, Johnnie Walker whisky and Smirnoff vodka, said the figure compared with net profits of £1.63 billion during the previous 2009-10 fiscal year.
"Diageo is a strong business as these results show. Our leading brands and superior routes to market have delivered volume growth, positive price/mix, gross margin expansion and strong cash flow," said chief executive Paul Walsh.
"We have strengthened the business, investing more behind our brands and in our routes to market and we have deepened our leading brand and market positions in the fastest growing markets of the world.
"In addition we have implemented changes to drive further operational efficiencies," he said
Sales grew two percent to £9.9 billion, aided by a string of strategic acquisitions in China, Tanzania, Turkey and Vietnam.
"Diageo expanded its presence in faster growing markets -- a controlling stake in Serengeti Breweries in Tanzania, an equity stake in Halico in Vietnam, the acquisition of Mey Icki in Turkey, an additional investment in ShuiJingFang in China and a controlling stake in Zacapa super premium rum, totalling £1.6 billion," the group added in the statement.
London-listed Diageo also produces Baileys liqueur, Captain Morgan rum and Tanqueray gin.
© 2011 AFP