French wine and spirit giant Pernod Ricard’s profits up 6.3 percent to €2.36 billion (USD2.7 billion) in 2017/18, driven by strong demands in China and India.
Sales growth for the 2017/18 accelerated to 6 percent from 3.6 percent in previous year, spurred by a 17 percent jump in China, 14 percent in India and a 4 percent in the United States.
The Paris-listed giant owns global brands including Absolute Vodka, Martell Cognac and Mumm Champagne. It is the world's third-biggest wine and spirit group by market capitalisation behind China’s Moutai and Britain's Diageo.
Despite uncertainties surrounding global trade and economic growth, the company forecast an underlying profit growth from recurring operations of between 5 and 7 percent for the full year ending 30 June 2019.
It predicts a boost in the July-September period from an earlier Mid-Autumn Festival in China, where it banks on a thirst for premium drinks from a fast rising middle-class.
Pernod Ricard also forecasts a "very strong" first quarter in 2019, saying it would benefit from a low comparison base in India where it has faced setbacks including a ban on liquor outlets.
Alexandre Ricard, the chairman and chief executive officer of Pernod Ricard, said that the key drivers in China and India were the emerging middle class.
"We're in investment mode, as well, in both these countries as they drive our growth, currently, and also for the medium to long-term,” said Ricard.
(the writer can be contacted at: SusanLewis@thewinechronicle.com)