CANADA: Corby Distilleries FY profits fall on charge
- Seagram Coolers charge hits profits
- Sales dip on weak demand
- Economy remains "fragile"
Corby Distilleries endures tough year
Corby saw net profits for the year to the end of June drop by a third on the previous year, to CAD20.7m (US$19.5m).
Higher advertising spend in the fourth quarter and a CAD9.4m after-tax impairment charge on the Seagram Coolers business during the year were the main reasons for the profits decline, Corby said late last week. It said that Seagram Coolers had underperformed against rivals.
Corby also reported a drop in full-year sales, to CAD162m from CAD169m a year earlier. Operating profits were broadly flat against last year, at CAD43m.
"While [sales] increased in 2009, it was primarily attributable to increased average selling prices and favourable changes in product mix, as consumer consumption actually declined," said Corby. "In addition, sales in 2009 benefited from the initiation of the company's representation of the ABSOLUT vodka brand.
"In 2010, sales continued its decline from 2009 levels, as customers continued to adjust inventory levels to better match forecasted consumer demand." Sales in the fourth quarter were flat against the prior year.
The group said that there was "substantial uncertainty" about the economic outlook in Canada and that the country's recovery from the global financial crisis remained "fragile".
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