UK’s Diageo Profit Half Down After COVID-19 Restictions Period
On 4 August, British spirits producer Diageo reported its results for the second half and full financial year 2020, which ended June 30 for the company. Diageo reported that annual results were severely spoiled during the second half of the fiscal year (January-June 2020), which in many countries had several months of strict restrictions due to the coronavirus pandemic, including the closure of bars, cafes, restaurants and other establishments where alcohol is consumed, as well as a general decline in consumer demand.
While Diageo’s global sales rose 4% in the first half of fiscal 2020, they fell by 23% in the second half. Corporate sales hit the hardest, showing a half-year decline of 56%, followed by sales in Latin America and the Caribbean (-40%), and in third place – Asia-Pacific (-38%). As a result, Diageo’s full fiscal 2020 operating profit fell 47% to £ 2.1bn from £ 4bn a year earlier, while net income more than halved from £ 3.16bn in fiscal 2019 to £ 1.4bn in fiscal 2020.
“The past financial year can be divided into two parts – after good results in the first part of the year, the outbreak of COVID-19 came, which brought significant problems to our business. This influenced the results of the whole year,” said Ivan Menezes, CEO of Diageo.
After the publication of financial statements, the company’s shares fell by 5.5%.