Diageo earnings weakened by falling sales in China
Diageo, the world's largest spirits maker by sales, posted weaker-than-expected earnings on Thursday, hurt by a slowdown in China and volatility in other emerging markets.
Over the past year the maker of Guinness, as well as Johnnie Walker Scotch whisky and Smirnoff vodka, has grappled with a host of issues in emerging markets - including currency devaluations, a tax increase on beer in Kenya and a steep fall in sales of China's baiju spirit due to government-enforced austerity measures.
Diageo took an asset impairment charge, worth about £79m (€100m) on a net basis, on the value of its nearly 40pc stake in baiju maker Sichuan Shuijingfang, it said this week after sales of the brand fell 78pc last year.
Diageo reported earnings of 95.5 pence per share before one-time items for the full year ended June 30.
Net sales fell 9pc to £10.3bn (€13bn).