Ré my Cointreau Profit Jumps on Robust U.S., China Cognac Demand

PARIS—Ré my Cointreau SA's fiscal-year net profit jumped more than 10%, led by strong demand for the French liquor group's sales of cognac and other dark spirits in the U.S. and rebounding demand in China and the rest of Asia.

The owner of Ré my Martin cognac and Cointreau liqueur said on Thursday that net profit rose to €102.4 million ($125.9 million) in the year to end-March from €92.6 million the previous year.

Revenue rose 8.9% to €1.05 billion, partly helped by favorable exchange rates. On a comparable basis, revenue rose 0.3%. Ré my Cointreau increased its dividend by 4.6% to €1.60 a share.

After two years of decline, sales of Ré my Martin, which accounts for around half of company revenue, recovered across regions with strong growth in the 1738 Accord Royal and Club brands in the U.S. and Asia, the company said.

The news should reassure the luxury-goods industry at large, given demand in China had slumped after a government crackdown on excessive spending and gift-giving began in 2013. Slowing economic growth in other emerging markets, terrorism threatening the flow of big-spending travelers and volatile exchange rates have also cast their shadow over the sector.

While other distillers, including rival Pernod Ricard's Martell label, have launched less-expensive drinks in the Chinese market and cut prices to prop up declining sales, Ré my has maintained its focus on the very high-end segment, also benefiting from growing demand in U.S.

Ré my Cointreau said that prices for liqueur and the company's efforts to cut overheads helped offset extra spending on communications, particularly in the U.S., and the higher costs of eaux-de-vie, the spirits used for making cognac.

Current operating profit rose 19% to €178.4 million, with the company's current operating profit margin improved to 17.0% from 16.2% the previous year, Ré my Cointreau said.

The company said that it expects growth in current operating profit in the current fiscal year, stripping out the impact of foreign exchange fluctuations and mergers and acquisitions.

Write to William Horobin at [e-mail]

(END) Dow Jones Newswires

June 09, 2016 03:45 ET (07:45 GMT)

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