The brewer could be playing down its prospects for Russia, Nomura suggests

The brewer could be playing down its prospects for Russia, Nomura suggests

Carlsberg could be playing down its prospects in Russia for “political reasons”, according to an analyst. 

In a note today (19 February), following the brewer's full-year results yesterday, Nomura flagged that the company's commentary on Russia “looks quite cautious” for the year. But the note added: “As well as a desire to keep market expectations low, after the 2011 profit warning, we believe that the company is also keen not to put too much good news on Russia in the shop window for political reasons.” 

Russia has brought in a series of measures to crack down on alcohol abuse in the past year, including a ban on drinks advertising, outlawing sales from outdoor kiosks and steep tax rises. 

But Nomura said the outcome for the brewer in Russia could be better than it predicts. “The outcome could be more positive, with volumes being helped by the narrowing of the relative price point of beer vs vodka, and margins boosted by rational pricing, as well as the company continuing to outperform after strong market share momentum in Q4,” the note said. 

Nomura also suggested that the company's abandoning of its medium-term margin targets in favour of an aim to deliver longer-term adjusted EPS of 10% per annum shows the group has “confidence for the future”.