Global drinks giant Pernod Ricard reported a 12% drop in drink sales in the first quarter of the year, but a boom for vodka, saying that business in eastern Europe and in duty-free shops was weak.
Sales of vodka in Germany jumped 41%, in France 10%, Brazil 16% and Spain 6%, as gloom about the economy swept the globe.
Sales for the first nine months of the company's financial year from July to March showed a small increase of 0.3% to €5.55 billion. But for the whole of its year 2008-2009, the group stood by its target of achieving 'two-figure growth of current net profit' which for the first time would exceed '€1 billion.'
The group said that shares it was issuing to raise capital of €1 billion to reduce debt would be priced at €26.70 each, a discount of 35.7% to yesterday's closing price of €41.52.
The overall drop in sales for the quarter was in line with forecasts by Pernod. The group had already signalled the poor results for January to March, the third quarter of its financial results, and said that the setback was the result of clients reducing inventories and a policy by the group to reduce its exposure to customers who might have difficulty paying bills.
Sales fell by 12% on a 12-month basis, close to the 13% fall indicated last week, to €1.34 billion. Sales were particularly weak in markets considered mature, or well supplied with established brands.
However the fall in sales was contained by the inclusion of figures since July, 2008, for Swedish company Vin & Spirit. Sales of the main brand, Absolut vodka, rose strongly on all markets except in the US where they fell by 4%.
