Diageo writes down £1.3 billion on account of disruption caused by coronavirus

MUMBAI: Diageo Plc, the world’s largest spirits maker, has written down £1.3 billion (₹12,720 crore) globally on account of coronavirus-led disruptions, with India accounting for half of the impairment charges. The non-cash write-down reflects the impact of Covid-19 and the challenging trading conditions in markets such as India, Nigeria, Ethiopia and Korea, the parent company of Bengaluru-based United Spirits said.“An impairment charge of £655 million in respect of the India cash-generating unit containing the India goodwill was recognised in exceptional operating items. Impairment charges of £78 million in respect of the Old Tavern brand, £38 million in respect of the Bagpiper brand and £1 million in respect of fixed assets in India were also recognised in exceptional operating items,” the maker of Johnnie Walker whisky and Smirnoff vodka said in a statement after reporting an 8.4% drop in global sales for the year ended June 30.Bagpiper, with 6.1 million 9-litre cases sold annually, and Old Tavern, with 5.3 million cases, are among the top 20 whisky brands in the world by volume. While Bagpiper sales grew 9%, Old Tavern sales declined 14% last year.Impairment charges are taken when the value of assets or goodwill is no longer fully recoverable or their ability to generate cash falls due to a change in legal or economic circumstances or as the result of a casualty loss from unforeseen hazards.CEO Ivan Menezes said the company has committed a $10 million package to support the on-trade recovery as part of its global raising the bar programme.

from Economic Times https://ift.tt/3k6JRap
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