PARIS(Reuters) -Remy Cointreau said first-half operating profit fell less than feared despite lower sales, thanks mostly to cost cuts, providing some relief to the embattled spirits maker facing tariffs in its key U.S. and Chinese markets.

The maker of Remy Martin cognac and Cointreau liqueur, which last month dropped hopes for a quick recovery in sales, predicted organic sales would decline by between 15% and 18% in full-year 2024/25, with a current operating profit margin of between 21% and 22% on an organic basis.

Remy reported operating profit of 147.3 million euros ($155.30 million) for the first six months of fiscal 2024/25, which ends on March 31. That was a like-for-like fall of 17.6%, lower than expectations of a 20.6% decline in a company-compiled poll of 15 analysts.

Remy Cointreau sales have suffered steep declines as retailers and wholesalers cut expensive spirits from inventories, while demand stayed sluggish in China's weakening economy.

The U.S. and Chinese markets drive the majority of cognac sales, which account for around 70% of Remy's revenues. Beijing has slapped tariffs of between 30% and 40% on imports of EU brandy, hitting French firms such as Hennessy, Pernod Ricard and Remy Cointreau days after the 27-state bloc voted for tariffs on Chinese-made EVs.

On Thursday Remy said it had taken note of the provisional decision by China's commerce ministry to apply additional duties of 38.1% on cognac imports from October 11, 2024.

"If this decision is confirmed, the impact would be marginal for the 2024/25 fiscal year and the group would activate its action plan to mitigate the effects from 2025/26," it said.

Remy Cointreau has already said mitigation actions included price rises, while French cognac maker Hennessy suspended a plan to bottle its brandy in China to avoid tariffs, staff briefed by management said this week, after hundreds of workers went on strike last week to protest the move. U.S. President-elect Donald Trump's threat of universal tariffs of 10% on foreign products would deliver a further blow to Remy's U.S. business.

($1=0.9485 euros)

(Reporting by Dominique Vidalon; Editing by Sudip Kar-Gupta and Clarence Fernandez)

By Dominique Vidalon