Diageo’s half-year results disappointed investors – Kommersant

Shares of the world’s largest producer of alcoholic beverages, the British company Diageo, fell 4% in London after the publication of financial results the first half of the year and forecasts for the second. In the first six months of the current financial year, Diageo’s net sales decreased by 1.4% to $11 billion, while operating profit fell by 11.1% to $3.3 billion.

Behind the drop in performance is the problematic situation in the Latin American market. There, net sales for the half-year fell by 23% amid lower demand for alcoholic beverages amid what the reporting notes were “macroeconomic pressures.” Unsold stocks of expensive alcohol are piling up on the market; they will last for several months.

Latin America accounts for about 11% of Diageo’s total sales, but it is a highly profitable business and its results always have a significant impact on the manufacturer’s operating profit. According to Diageo CEO Debra Crew, “Excluding the Latin American market, Diageo’s overall organic net sales would have increased 2.5% for the half-year, driven by strong growth in Europe, Asia-Pacific and Africa.” Results were also weak in Diageo’s largest market, North America, where sales fell 2%.

Diageo also warned about the situation that is expected in the current half of the year. According to the company, the macroeconomic situation in the world “will remain difficult.”

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Alena Miklashevskaya