US: CEDC swings to FY profits, lowers 2010 guidance
Although US-based, CEDC operates primarily in Eastern Europe
Central European Distribution Corporation has reported a return to profits for its 2009 full-year, but the drinks group has lowered sales and earnings guidance for 2010.
Central European Distribution Corporation (CEDC) said today (1 March) that net profits for the 12 months to the end of December were US$78.3m, compared to losses of $18.6m in 2008.
Earnings were boosted by the consolidation beginning in the second quarter of the year of the Russian Alcohol Group, which was previously accounted for as an equity investment.
However, fourth quarter net losses deepened to $95m, against $82m a year earlier. Comparable net earnings for the year were flat against 2008 at $128m.
Higher excise taxes and unfavourable currency rates caused group net sales for the year to fall by 8.5% to $1.5bn, said the firm, which owns Bols and Zubrowka and distributes in Poland for a range of drinks companies, including Remy Cointreau, Gruppo Campari and Beam Global Spirits & Wine.
Net sales in the fourth quarter rose to $537m, against $459.6m in the same period of 2008, as the Russian Alcohol Group offset decline in the firm's Polish distribution business.
"During the fourth quarter of 2009 we experienced a soft top line performance, driven mainly by weakness in the Polish distribution business as compared to the fourth quarter 2008, mainly due to the Polish excise increase that took place on 1 January 2009," said CEDC president and CEO William Carey.
"We have spent the last twelve months strengthening our ownership position of some of our key assets which places the company in a strong position to benefit from the consumer recovery which we anticipate to accelerate towards the second half of 2010."
Despite this, CEDC cut sales and profits guidance for 2010. It now expects net sales of between $1.8bn and 1.9bn, against a range of $1.8bn to $2bn previously. Comparable diluted earnings per share guidance fell from $3.00-$3.15 to $2.50-$2.62 for the year.
This reflects revised currency rate expectations and a one-off interest expense of up to $102m for the year, said the group.
For the full announcement, click here.
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