Diageo logs rising first-half net profit

Diageo, the British maker of alcoholic drinks, on Thursday posted rising interim net profit, buoyed by asset sales and lower financial charges, but turnover was hit by adverse currency effects.

Earnings before taxation rose seven percent to £1.4 billion ($2.0 billion, 1.8 billion euros) in the six months to December from a year earlier, said the maker of Guinness stout, Smirnoff vodka and Baileys liqueur.

Operating profit however fell seven percent to £1.7 billion.

Sales volumes meanwhile sank three percent, while net sales dipped five percent to £5.6 billion in the reporting period, Diageo added in a results statement.

The performance was hit by the weakness of several currencies, including the euro, the Venezuelan bolivar and the Brazilian real, against the British pound.

Sales were also affected by the sale of non-core assets in Jamaica, Malaysia and Singapore.

Organic sales growth, excluding the effects of acquisitions and currency fluctuations, stood at 2.0 percent.

"Diageo has become a stronger, more competitive business," said chief executive Ivan Menezes in the statement.

"We have delivered volume growth, a stronger top line, improved the performance of our key brands, driven cost productivity and continued to generate strong cash flow.

"While trading conditions remain challenging in some markets, Diageo's brands, capabilities in marketing and innovation and our route to consumer have proved resilient."