June 4, 2020 / 5:38 AM / a month ago

Coronavirus crisis to weigh on Remy Cointreau H1, new CEO sticks to value strategy

PARIS, June 4 (Reuters) - French spirits company Remy Cointreau predicted its current operating profit would fall by 45-50% in the first half of its 2020/21 fiscal year due to the coronavirus crisis, although it expected a strong recovery in the second half.

The maker of Remy Martin cognac also said more favourable spirits consumption trends in the United States in the past few weeks had led it to upgrade its forecasts in this area. Remy now forecast a fall in first quarter sales of around 45% - an improvement from a previous anticipation of a 50-55% slump.

Remy made the forecasts as newly installed chief Eric Vallat vowed to pursue the group’s push towards higher-priced spirits to boost profit margins, setting new medium-term financial targets.

Remy’s 2020/21 fiscal year started on April 1.

Remy also reported on Thursday a well-flagged 22% fall in like-for-like current operating profit for the fiscal 2019/20 year that ended March 31, reflecting weaker sales and higher costs.

Operating profit reached 215.1 million euros ($241.26 million). This was a little better than the consensus of analysts’ forecasts for profits of 209.2 million euros.

$1 = 0.8916 euros Reporting by Dominique Vidalon; Editing by Sudip Kar-Gupta

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