Pernod profit flows despite currency fluctuations

Drinks group Pernod Ricard have reported pre-tax profits of €167m and an increase of 3.7%.

The parent company of Irish Distillers said the first half of 2003 had been characterised by strong currency fluctuations, a difficult economic environment in many countries and the impact of SARS in Asia.

Despite this the company reported an operating profit of €279m - an increase of 5.2% - but representing growth of 25% at constant exchange rates.

Volume improvements of Chivas Regal (+4%) and Martell (+9%), as well as the growth driver brands (Ramazzotti, Jameson, Jacob’s Creek, Havana Club, The Glenlivet) attributed to this good performance, the company said.

Sales, excluding duties and tax, came in slightly down at €1.5bn. Non wine and spirits activities accounted for just €4.3m of the group’s operating profit.

Free cash flow reached €197m, compared to €81m in 2002.

This was attributed to stronger cash flow (+22%) and the reduction in working capital requirements (-€37m), as well as tight control of capital expenditure.

Chairman and Chief Executive Officer, Patrick Ricard said: "The group has demonstrated a remarkable ability to increase the profitability of its core activities and to pursue fast debt paydown.

"The achievements of the first half of 2003 lead us to expect organic growth in net profit excluding exceptional items of around 15% for the entire year."