Scotland’s largest whisky producer Diageo has seen its profits plunge nearly 50% after it was hammered by the closure of pubs amid the coronavirus pandemic.
The Guinness and Johnnie Walker owner said its half-year profits almost halved as operating profits dived 47% to £2.1bn.
The company was also hit by a £1.3bn write-down across its operations in India, Nigeria, Ethiopia and Korea.
Total sales fell by 9% to £11.8bn for the year despite being boosted by growth in sales in North America.
Kathy Mikells, chief finance officer of the company said sales in the US were “resilient” as shoppers continued to buy tequila and other spirits to drink at home.
She said: “It was a year of two distinct halves due to Covid-19.
“But we did see improvements continue through the fourth quarter, with sales moving higher in April, May and June, so we are confident in our current position.”
Ivan Menezes, chief executive of the company, said: “Through these challenging times we have acted quickly to protect our people and our business, and to support our customers, partners and communities.
“The actions we have taken to strengthen Diageo over the last six years provide a solid foundation to respond to the impacts of the pandemic.
“We are now a more agile, efficient and effective business.”
William Ryder, equity analyst at Hargreaves Lansdown, said: “Diageo is still a great business, still owns some terrific brands and whisky is still a very difficult market for newcomers to break into.
“The hit to earnings should be short-lived provided the global economy doesn’t take too long to recover.
“We think the group will continue to do well long term, but management will have to focus more on debt reduction than they probably would have liked.”