February 13, 2020 / 6:33 AM / 14 days ago

Pernod Ricard cuts annual profit growth forecast due to China virus

PARIS, Feb 13 (Reuters) - French spirits group Pernod Ricard said on Thursday it was cutting its full-year profit growth outlook for 2019-2020 as the coronavirus epidemic in China was likely to have a severe impact on its third quarter performance.

Pernod Ricard, which makes 10% of its sales in China, said it could not currently predict the duration and impact of the crisis but added that it nevertheless remained confident on its overall corporate strategy.

Pernod, the world's second-biggest spirits group behind Diageo, is now targeting an organic rise of between 2%-4% percent in profit from recurring operations for the year ending June 30, 2019. This compares to a previous forecast for 5-7 percent growth.

Pernod, which makes Martell cognac, issued the forecast as it posted first-half results that nevertheless beat forecasts, helped by cost cuts and shipments tied to the earlier timing of the Chinese New Year.

First-half profit from current operations reached 1.788 billion euros ($1.9 billion), an organic rise of 4.3%, which was above analysts' expectations for a 3% rise.

Sales reached 5.474 billion euros in the six months to Dec. 31, representing an organic rise of 2.7% which was also above analysts' expectations for 2.1% growth.

$1 = 0.9200 euros Reporting by Dominique Vidalon; Editing by Sudip Kar-Gupta

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