Remy Cointreau reports 12.5 pct fall in full-year profit owing to destocking by customers

Paris-based wine and spirits group Remy Cointreau reported Wednesday a 12.5 percent fall in full-year net profit, owing to substantial destocking by customers and costs associated with its exit from distribution network Maxxium.

It also declined to give an outlook for its 2010 earnings because of the uncertain economic climate.

The beverage maker said net profit for the year ending March 31 was euro86.1 million ($120 million), compared with euro98.4 million a year earlier. Operating profit fell 14 percent to euro137 million.

Remy Cointreau said operating profit in its largest division — cognac — fell 20 percent to euro75.1 million, as the "sustained price increases did not fully offset the volume declines noted in the U.S. and Russia, or the impact of destocking as a result of leaving Maxxium."

The company, which traces its origins to the founding of Remy Martin Cognac in 1724, exited a distribution deal with Maxxium in March.

But Remy Martin said that in China it continued to see double-digit growth, and that advertising investment was increased and targeted toward Asia.

In an uncertain economic environment, Remy Cointreau said it has "decided to maintain its value strategy, now based on a substantially restructured and controlled distribution network, and to continue its strategy of carefully selected price increases for its premium brands."

Remy Cointreau shares fell 3.8 percent to euro26.61 in Paris.

Like many French companies, Remy Cointreau reports revenue and earnings separately.