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article imageDiageo bubbles despite emerging market pressures

By AFP     Jan 30, 2014 in Business

Diageo, the world's biggest producer of alcoholic drinks, announced on Thursday a rise in first half-year profits despite a "challenging emerging market environment".

The maker of Baileys liqueur, Captain Morgan rum and Guinness stout said net profit rose 5.0 percent to £1.599 billion ($2.632 billion, 1.935 billion euros) in the final six months of 2013.

That was compared with the outcome for the equivalent period a year earlier. Diageo's financial year runs from July to June.

Emerging market net sales rose by just 1.3 percent, with gains limited by cost and price pressures particularly in China and Nigeria.

"We have continued to demonstrate the strength of our broad portfolio and diverse global business in a period which saw a more challenging emerging market environment," Diageo chief executive Ivan Menezes said in group's earnings statement.

"Sustained performance in the US and improved performance in Western Europe enabled Diageo to absorb the current challenges in some of our emerging markets."

Menezes said Diageo expected "some top line improvement in the second half".

He added: "Even though some markets may remain challenging, this business is in good shape for the medium and long term and we remain committed to achieving our performance ambition."

Menezes, formerly Diageo's chief operating officer, became chief executive last year when he replaced long-serving Paul Walsh at the helm.

Diageo, which produces also Johnnie Walker whiskey and Smirnoff vodka, announced on Monday the purchase of premium tequila brand Peligroso for an undisclosed sum.

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