It seems that no-one is immune to the current European crisis as Remy Cointreau shares took a dive today (30th November 2010) from their 3 year high of yesterday. They dropped 2.7% down to 50.70 euros – due to the Greek economic crisis which has written off 45 million euros from its Greek Brandy – Metaxa, as sales plummeted in the 6 months through to September. This wiped two thirds from the Remy Groups net profit in the first 6 months trading.
In fact, the liquor and spirits industry in general has had a highly negative effect on the groups profitability, although success in other areas has managed to negate this. China in particular has helped the Cognac division with a 46% increase in its current operating profit, and there has also been a recovery in sales in the USA during the 2nd quarter of the year.
Because of this success, Remy Martin have just announced an order of an additional 3000 hl of pure alcohol for this year, bringing the total for the year to 59,500 hl AP.
Remy’s chief, Jean Marie Laborde, has said that he is confident that the group’s profits in the 2nd half of the year, along with the sale of the Champagne side of operations will ensure that the group, in the very worst scenario, will break even at operating levels for the year.
The group plans to raise its sale prices of all products across the board and in all countries in 2011, and says that there has been a tremendous interest in the sale of its champagne brands. They hope that initial tenders will be in by the end of December 2010 and that the transaction could be completed by March 2011. If the terms are adequate this could then lead to the Remy Group making further acquisitions in the following year.
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Sources: fr.news.yahoo.com, www.reuters.com, www.forexyard.com