Diageo’s first-half profit edges higher on cost-saving measures

London: Diageo Plc reported first-half profit growth that beat estimates slightly as the world’s biggest distiller cut costs and took measures to improve profitability.

Earnings before interest and tax rose 0.7% on a so- called organic basis in the six months ended 31 December, London- based Diageo said on Thursday in a statement. The median estimate of 16 analysts surveyed by Bloomberg News was for no change.

The maker of Bulleit whiskey is battling weakness across Europe and tougher conditions in emerging markets such as China, where government anti-austerity measures have curbed shipments of scotch and baijiu liquor. Chief executive officer Ivan Menezes wants to offset those headwinds with new products in the US, the world’s most profitable spirits market, and by expanding Diageo’s presence in India through the recently acquired United Spirits Ltd.

“We delivered the planned savings from our global efficiency program together with procurement benefits in marketing spend,” Menezes said in the statement, describing the second-quarter performance as “stronger.”

Diageo rose 1% to 1,962 pence in London trading on Wednesday, extending the stock’s gain this year to 6.1%.

First-half organic sales fell 0.1%, in line with analyst estimates and an improvement on the first-quarter’s 1.5% decline. Organic measures exclude the effects of acquisitions and currency fluctuations. Bloomberg