Remy’s H1 profit above expectations

Remy Cointreau SA reported a stronger-than-expected 27.2% organic jump in first-half operating profit, driven by strong demand for its premium cognac in China and the United States and cost controls.

For the full year of 2022/23, the maker of Remy Martin cognac and Cointreau liqueur reiterated that it expected another year of strong organic sales growth, with the second half set to reflect a return to normal consumption trends after two years of “exceptional growth”.

“As Remy Cointreau continues to invest in marketing and communications particularly in the second half of the year, current operating profit margin will be driven by gross margin resilience despite an inflationary environment and tight control of cost overheads,’’ the company said.

Group operating profit for the six months to Sept 30 reached €319.3 million ($333.1 million), marking an organic rise of 27.2%.

That outperformed a companycompiled consensus of 22 analysts that forecast current operating profit of €306 million, up 23.8% like-for-like.

Remy Cointreau’s fiscal year starts on April 1 and ends on March 31.

The company also remains confident of its ability to gain market share in the exceptional spirits market as it takes advantage of new consumption trends.

The pandemic has accelerated Remy Cointreau’s long-term drive towards higher-priced spirits to boost profit margins, speeding a shift towards premium drinks, cocktails and e-commerce as people drank more expensive drinks at home.

Operating profit at the Remy Martin cognac division, which makes nearly 90% of group profit, totalled €299.7 million in the first half, marking an organic rise of 35.7%.

Remy Cointreau had already reported a 21.1% organic jump in first-half sales, boosted by a recovery in demand for its top cognac brands in China during the Mid-Autumn festival in a market still impacted by stop and start Covid restrictions.