• H1 net profits down 9% to EUR62.7m (US$78m)
  • Net sales in six months to end of September down 16% to EUR471.8m
  • Operating profits decline 23% to EUR102.1m
  • Remy Martin operating profits fall 33% to EUR78m
Remy Cointreaus Cognac unit is under pressure in China

Remy Cointreau's Cognac unit is under pressure in China

Remy Cointreau has slowed falling profits in its fiscal first half, but has warned that Cognac trends in China continue to damage performance.

The company, which last year issued a warning after H1 profits dropped 20%, said today that profits in the six months to the end of September fell by 9% to EUR62.7m (US$78m). Net sales in the period were down 16% to EUR471.8m in the same period while operating profits declined by 23% to EUR102.1m.

As highlighted in a sales update last month, the company's Remy Martin Cognac brand was behind the declines as it suffered from on-going destocking in China caused by anti-extravagance measures introduced in late-2012.

The brand saw operating profits fall 33% to EUR78m in the six-month period on top of a 15% sales slip.

Remy's non-Cognac units performed well, with its Liqueurs & Spirits division increasing operating profits by 23%. Operating profits from the 'Partner Brands' segment were down 12% but, excluding the termination of a US distribution deal with Edrington in March and on an organic basis, the unit posted a 14% operating profits rise.

Remy said underlying global Cognac trends remained firm.

“Rémy Martin Cognac remained adversely affected by evolving consumption patterns in China, while the strength of the brand is confirmed in most of its other major markets,” the company said.

As of 1202 CET today, Remy's share price was up 2.3% on the Paris exchange.

To read the company's full results, click here.