Pernod Ricard reports profit fall, cuts 900 jobs

28th August 2014, Comments 0 comments

Drinks giant Pernod Ricard reported a fall in annual profits on Thursday, blaming in part a sales slowdown in China, and cut 900 jobs worldwide.

Net profit over 12 months to the end of June fell by 14.0 percent to 1.02 billion euros ($1.35 billion), and sales fell by 7.0 percent to 7.94 billion euros.

Operating profit fell by 8.0 percent to 2.05 billion euros.

The price of shares in the group was showing a gain of 2.25 percent to 90.04 euros in early trading.

After the results statement, the group said at a press conference that it would shed 900 jobs around the world, of which fewer than 100 would be shed in France, as part of a cost-cutting programme.

The group employs 19,000 people throughout the world of whom 2,800 work in France.

Pernod Ricard, a French group ranking number two in the world's spirits drink industry after Diageo of Britain, owns the Ricard pastis brand, Absolut vodka and Ballantine's whisky.

In February, the group had responded to a fall of sales in China by lowering its outlook for growth of current operating profit for the year to 1.0-3.0 percent from 4.0-5.0 percent expected previously.

In the previous 12 months, this measure of profitability had grown by 6.0 percent.

Several groups selling luxury products have encountered sales difficulties in China where a campaign against ostentatious entertaining and gift-giving by businesses has curbed ostentatious consumption.

Chief executive Pierre Pringuet said that even though the business environment had turned out to be more difficult than expected, the group had achieved its revised targets announced in February.

The group had also put into effect its "Allegro" programme to raise operating efficiency and growth by generating savings of 150 million euros, as announced in February.

© 2014 AFP

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