Billionaire Andrew Tan-led Emperador Inc. said profits in the nine months to September slipped as inflation pinched its flagship liquor business.
In a statement on Thursday, the world’s biggest brandy producer said net income during the period was lower by 1.4 percent to P7.2 billion as cost pressures outpaced the increase in sales.
Revenues during the period jumped 11 percent to P42.6 billion on gains from both whisky and brandy.
“Our global business remains robust in the first nine months of this year as evidenced by the overall topline growth, but rising inflation limited earnings performance,” Emperador Inc. president Winston Co said in a statement.
“There is so much volatility in the global market. We are glad to deliver sustained earnings through our wide portfolio of brands,” he added.
The company said the bottomline was impacted by shrinking profit margins, especially on more affordable brandy products.
“The resulting higher input costs coupled with higher logistics costs, advertising and promotional expenses and increased on-trade activities have a greater impact on the operating margins of the brandy segment that sells at more accessible prices compared to whisky,” Emperador explained.
Emperador said in the statement sales of whisky, which includes products by Scotland-based
Whyte and Mackay, jumped 16 percent during the nine-month period while brandy sales expanded by 8 percent.
“Whisky segment growth is driven by the single malts across almost all regions around the world and the return of travel retail. The brandy segment sustains year-on-year topline growth in its key markets in the Philippines, Spain, Mexico and North America,” Emperador said.
Emperador, part of Tan’s consumer conglomerate Alliance Global Group Inc., owns Emperador Brandy, Fundador Brandy, The Dalmore, Jura, and Tamnavulin Single Malt Scotch whiskies. The products are available in more than 100 countries across the globe.
Last July, Emperador completed a secondary listing in the Singapore Exchange Securities Trading Ltd., complementing an earlier listing in the Philippine Stock Exchange.
It earlier announced plans to bring international sales to 50 percent of revenues and profits by 2025.