US: Monster Beverage's legal woes still bite as H1 profits slide
- First-half net profits fall 8.4% to US$170.4m
- H1 net sales up 6.5% to $1.1bn
- Operating profits in first six months fall 3.2% to $286.7m
- Q2 sales up 6.5% $630.9m
Monster's profits are being hit by legal costs
Monster Beverage has continued to feel the impact of defending the safety of its products after reporting a drop in first-half profits, despite rising sales.
The California-headquartered energy drinks producer said yesterday (8 August) that net profits in the six months to the end of June dipped by 8.4% to US$170.4m, as sales rose by 6.5% to $1.1bn. Operating profits in the six months fell by 3.2% to $286.7m.
In its first quarter, the group saw a 16.6% drop in net profits. But the slide slowed in Q2, with net profits down by 2.7% to $106.9m. Sales in the three months rose by 6.5% to $630.9m, while operating profits increased by 5.7% to $179.4m.
The group's Q2 performance was affected by "foreign currency transaction losses of $8.3m; legal and other costs related to regulatory matters and litigation concerning the advertising, marketing, promotion, ingredients, usage, safety and sale of the company's Monster Energy brand drinks of $7.2m", it said.
Monster is locked in a court room fight with San Francisco's attorney general, Dennis Herrera, while it is also fighting a lawsuit from the family of a 14-year-old girl who died after allegedly drinking two 24oz cans of Monster.
Rodney Sacks, Monster's chairman and CEO, said: "We reiterate that our energy drinks are safe, based on both our and the industry's long track record and the scientific evidence supporting the safety of our ingredients.”
The company said its international sales “continue to meet expectations”. Sacks added: "We are continuing with our plans to market the Monster Energy brand in new international markets."
Shares in the group on the NASDAQ closed yesterday up 1.62% at $63.47.
To read the company's full statement, click here
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