Remy Cointreau’s profits have nose-dived in the first half of its fiscal year after the French drinks group was hit by an impairment charge on its Greece-based Metaxa brand.

Greece’s financial crisis has damaged the value of Metaxa and Remy Cointreau said today (30 November) that it was forced to record a EUR45m (US$59m) impairment charge on the brandy’s intangible assets. Sales of Metaxa also fell sharply as Greek consumers reined in their spending.    

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The charge weighed heavily on Remy Cointreau’s half-year profits, which fell by 65% to EUR14.1m for the six months to the end of September. Metaxa was largely responsible for a 5% fall in sales and a 25.6% drop in like-for-like operating profits at Remy’s spirits and liqueurs division.

Excluding one-off charges, however, the group’s profits rose by 28% on the same period of last year.

Favourable exchange rates and China’s thirst for high-end Cognac inflated operating profits, which rose by 24% to EUR81m, if the Metaxa charge is stripped out. However, Remy’s share price slipped by 3.5% on the Paris Stock Exchange after the group missed analysts earnings estimates.

The group offered no update on the sale of its Piper-Heidsieck and Charles Heidsieck Champagne arm, but half-year figures for the business underlined the firm’s stance that it is “not profitable enough”. Champagne remained in the red for the six months, reporting losses of EUR2.8m versus losses of EUR3.5m a year earlier.

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As previously announced, Remy Cointreau’s net sales rose by 18% to EUR428.2m for the half-year.

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