Guinness maker Diageo PLC on Thursday reported a double-digit profit rise in the first half of its financial year, but cautioned that organic sales growth in many regions will moderate due to a strong comparative.

Diageo shares fell 5.5% to 3,473.50 pence each in London on Thursday morning.

Diageo is a London-based brewer and distiller with brands including Baileys, Tanqueray, Johnnie Walker, Smirnoff and Captain Morgan.

Diageo said pretax profit in the six months to December 31 increased 12% to £3.06 billion versus £2.72 billion a year earlier.

Net sales rose 18% year-on-year to £9.42 billion from £7.96 billion. Diageo noted that organic growth was 10%, rising in all markets except in eastern Europe, which was hit by the company shutting down its operations in Russia. Diageo back in June announced it would wind down operations in from Russia following the country’s invasion of neighbour Ukraine in February 2022.

The company declared an interim dividend of 30.83 pence per share, up 5.0% from 29.36 pence a year ago.

Looking ahead, Diageo said it expects to return up to £4.5 billion of capital to shareholders in February. It also reiterated its medium-term guidance, between financial year 2023 and 2025, of organic net sales growth in the range of 5% to 7%.

However, it said it expects organic net sales growth in Europe is to moderate in the second half of its current financial year to June 30. In the Asia Pacific, Latin America & Caribbean and Africa regions, it anticipates growth to slow due to ‘strong’ sales during financial 2022.

In Europe, net sales were 10% higher on an organic basis in the first-half, while in Asia Pacific they climbed 17%. In Latin America & Caribbean, they rose 20% on an organic basis, while in Africa, organic net sales were up 6%. In North America, organic net sales climbed 3% in the first-half.

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