By Michael Susin

 

Diageo PLC said Thursday that net profit rose in the first half of fiscal 2022, boosted by higher sales volume and the strong growth of premium brands.

The London-based maker of Johnnie Walker scotch whisky, Guinness stout and Smirnoff vodka made a net profit of 1.97 billion pounds ($2.65 billion) for the six months ended Dec. 31, compared with GBP1.58 billion a year earlier.

Adjusted operating profit--one of the company's preferred metrics, which strips out exceptional and other one-off items--was GBP2.74 billion, compared with GBP2.26 billion, the company said.

Net sales rose to GBP7.96 billion from GBP6.87 billion, driven by a strong growth across all regions, it said.

A consensus estimate taken from FactSet and based on four analysts' projections had expected net sales to be GBP7.73 billion.

The company said growth was supported by positive trends in the industry, especially premium-plus brands of scotch, tequila and Chinese white spirits.

Diageo said it also benefited from a continued recovery of the on-trade channel in Europe and North America, together with the partial recovery of travel retail.

Organic net sales grew 13% in North America, 27% in Europe and 13% in Asia-Pacific, with Greater China net sales growth of 18%, Diageo said.

Diageo said it continues to expect organic net sales in the range between 5% and 7% and organic operating profit to grow in a range between 6% and 9% from 2023 to 2025.

The company said that inflationary pressures are being mitigated in part by its focus on revenue growth and productivity savings.

"We have made a strong start to fiscal 22. While we expect near-term volatility to remain, including potential impacts from Covid-19, global supply chain constraints and rising cost inflation, I am confident in our ability to successfully navigate these disruptions through the remainder of the year," Chief Executive Ivan Menezes said.

The board declared a dividend of 29.36 pence, up from 27.96 pence a year earlier.

 

Write to Michael Susin at michael.susin@wsj.com

 

(END) Dow Jones Newswires

January 27, 2022 03:20 ET (08:20 GMT)

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