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French drinks company Pernod Ricard says first-half net profit rises 18 percent

French drinks company Pernod Ricard says first-half net profit rises 18 percent

Wine and spirits company Pernod Ricard SA said Thursday that net profit in the first half rose 18 percent due to a strong performance from its premium brands and emerging markets.
The French company, vendor of brands like Chivas Regal whiskey and Beefeater gin, revised upward its full-year operating profit guidance, but the company made no comment on its current plans to acquire a vodka label.
Pernod Ricard has entered the bidding process for Swedish state-owned Vin & Sprits, maker of Absolut vodka, which the Swedish government is looking to sell. It has also been in talks for nearly three years to acquire the Russian vodka Stolichnaya, for which Pernod already has a limited distribution deal.
In a statement, Pernod said net profit for the first half of its fiscal year ended Dec. 31 rose to euro588 million (US$885 million) compared with euro500 million a year earlier. The figure came above forecasts for euro585 million (US$880 million).
Earnings before interest and tax in the first half rose to euro966 million (US$1.45 billion), up 15 percent from euro886 million a year earlier. That also topped forecasts, as analysts expected an operating profit from ordinary activities of euro958 million (US$1.44 billion).
Negative currency fluctuations _ primarily the dollar and currencies tied to the dollar _ reduced the growth of operating profit from ordinary activities by euro49 million (US$73 million) in the first half, the company said.
All geographic regions reported double-digit organic growth in operating profit from ordinary activities, with premium brands showing "spectacular" performances in emerging markets, Pernod outlined in the statement.
Pernod last month reported that its revenue in the second quarter increased 5.2 percent to euro2.16 billion (US$3.25 billion), and in the first half rose 5.9 percent to euro3.71 billion (US$5.58 billion).
In the earnings statement, Chairman and CEO Patrick Ricard said the increase in profit led the company to accelerate spending in advertising and marketing expenditure to boost its growth prospects.
"This enables us to revise upward, once again, our 2007/2008 full-year guidance and to aim at a growth in operating profit from ordinary activities of at least 12 percent on a like-for-like basis," he said.
Shares in Pernod Ricard jumped 2.9 percent to euro73 (US$109.82) in early trading on the Paris stock exchange Thursday. The shares are down nearly 8 percent since Jan. 1 amid concerns such as the cost of a possible vodka brand buyout and worries about economic slowdown in the United States.