Sarantis reports strong sales but lowers expectations
The Greece-based company reported good sales growth for the first half of 2008 for both its fragrance and cosmetics division and its household products business.
Profit higher than expected
Earnings after tax and minorities came in at €15.3m, an increase of 21.52 per cent – higher than analysts had expected, according to Thomson Financial.
Fragrance and Cosmetics sales grew 8.5 per cent to reach €55.65m for the year half ending 30 June 2008, with own brand offerings performing particularly well with sales increasing 14 per cent on the same period last year.
Nevertheless, the company said that results for own brands were negatively affected during the period by the re-launch of the men’s fragrance lines STR8.
In addition, expenses relating to the promotion of the STR8 range depressed the EBIT for the period.
During the first half of the year the fragrance and cosmetics business unit reported an EBIT growth rate of 0.8 per cent compared to the previous year’s results, contributing 43.6 per cent in H1 2008 compared to 41.6 per cent in H1 2007.
The most significant growth for the company was seen in Eastern European markets where the company operates ten subsidiaries and has a number of distributors.
Domestic sales growth was however not so significant, reporting an increase of only 2.2 per cent on 2007 taking the figure to €58.8m. The company also added that EBIT for the Greek market was particularly affected by expenses relating to STR8.
Lowered full year expectations
Despite recording a higher than expected profit, Sarantis has lowered its expectations for the full year and 2009.
According to the company, the current economic outlook and consumer market conditions has led to a revised estimate of full year sales growth of 10.1 per cent. Previously, the company said they would achieve sales growth of 12.4 per cent in 2008.
In particular, Sarantis noted a more conservative stance was needed when estimating proceeds coming from the US market.
The company has recently expanded its operations in the US extending its collaboration with Estee Lauder subsidiary Aramis to include female fragrance brand C-THRU.
The companies teamed up in July last year for the launch of the Mustang line in the US.
