Central European Distribution Corporation (CEDC) has posted a marked increase in second quarter net profits, thanks to the inclusion of the performance of The Russian Alcohol Group (RAG).

The US-based company, which operates primarily in central and Eastern Europe, said today (5 August) that net profits for the three months to the end of June came in at US$213.7m, compared to $46m for the corresponding period a year earlier. On a comparable basis, however, net profits fell by 18% in the quarter to $18.6m.

Sales slid by 14% to $362.1m, thanks to the 33% average devaluation of CEDC's primary functional currencies.

Operating profit in the quarter slipped to $41.9m compare to $42.8m in the same quarter of 2008.

For the first six months of 2009, net profits totalled $127.8m, almost double the $67.1m posted a year earlier. Net sales dipped, however, to $580m versus $734.9m. Operating profits were also down, at $62.2m against $68.3m.

"We believe the transparency of our core operations has been greatly enhanced with the consolidation of RAG financials during the second quarter of 2009," said company president and CEO William Carey. "RAG was previously accounted for as an equity investment."

Last year, CEDC spent US$181.5m on a 42% stake from investment firm Lion Capital in RAG, which accounts for over 10% market share in Russia's vodka market. The transaction coincided with Lion Capital's purchase at the time of a controlling stake in RAG. Then, last April, CEDC upped its stake in RAG to 54%, when it bought further shares from Lion capital for $17.8m.

Also today, CEDC said it closed the purchase of a 6% stake in RAG, as a result of the acquisition of equity held by various minority investors in RAG earlier this week, for a consideration of $30m.

The company also reconfirmed its full-year net sales guidance of between $1.55bn and $1.68bn, and its full year comparable fully-diluted earnings per share guidance of between $2.40 and $2.65.

For the official statement from CEDC, click here.

For CEDC's Q1 results, click here.

An update, with further comments following the company's webcast, appears here.