CANADA: Seagram Coolers haunts Corby Distilleries in Q3
- Q3 net profits sink by 41% to CAD2.7m (US$2.78m)
- Operating profits fall by 18% to CAD5.6m
- Net sales rise by 2% to CAD29.8m
- Excluding Seagram charge, profits down by 3%
Corby Distilleries' Q3 profits hit by Seagram Coolers loss
For the three months to the end of March, Corby's net profits dropped by 41% to CAD2.7m (US$2.78m). The Canada-based drinks group blamed most of the fall on a CAD1.7m after-tax loss on the sale of Seagram Coolers, which it has agreed to offload to Brick Brewing for a total CAD7.3m.
Over the last couple of years, Seagram Coolers has lost significant value in Canada and Corby was forced to report CAD9.4m in after-tax charges on the brand in the first nine months of its previous fiscal year.
That charge helped to flatter net profits for the first nine months of Corby's current fiscal year. Over the period, profits increased by 48% to CAD20.9m, the group said yesterday (11 May).
Excluding the Seagram effect, the profitability of Corby's core business is under pressure. Operating profits fell by 18% in the third quarter, to CAD5.6m, and by 8% for the nine months, to CAD30.9m.
"The decreased earnings is mainly due to softer sales volumes experienced primarily in British Columbia and increased advertising and promotional spend being invested behind the company's key brands," said Corby. "The decreased sales in British Columbia has been felt by the spirits industry as a whole, as total spirit retail volumes decreased by 4% during the nine-month period," it said.
Lacklustre economic conditions, together with a tough comparative against last year's Winter Olympics, have hit the spirits industry, it added.
Despite this, Corby's net sales increased by 2% in the third quarter, to CAD29.8m. Nine-month sales dropped by 1% to CAD107.4m.
For the full company announcement, click here.
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