DENMARK: Carlsberg doubles full-year profits guidance on H1 rise

• Russia outlook improves, delivers strong currency gains
• Beer sales down across Europe
• Reports strong market share gains in Asia 

Carlsberg has doubled its full-year earnings guidance after reporting a leap in net profits in the first half of 2010, despite difficult conditions in several of the brewer's major beer markets.

Carlsberg said today (17 August) that it expects net profits to rise by 40% in 2010 compared to its previous forecast of a 20% increase. The move follows the brewer's announcement of a 57% jump in net profits for the six months to the end of June, to DKK3.1bn (US$533m).

Better-than-expected market conditions in the key Russian market, together with a more favourable RUB currency, persuaded Carlsberg to raise its guidance.

Russia's beer market, hit by a three-fold tax rise on beer in January, has proved more resilient than anticipated and market volume decline in 2010 is now set to be high single-digit, rather than a range of 10 to 14% earlier predicted by Carlsberg. The Russian market share of the firm's Baltika Breweries unit rose from 39% to 40% between the first and second quarters of the year.

Despite the improved consumer outlook in Russia, the country was still the major drag on Carlsberg's half-year volume sales. Like-for-like volumes fell by 3% on the first half of 2009, to 55.8m hectolitres, with Northern and Western Europe also showing a 2% decline.

Net sales for the six-month period fell by 2%, and by 4% on a like-for-like basis, to DKK28.9bn, the Denmark-based brewer said. Operating profits rose by 12% to DKK4.98bn, although around three quarters of this increase was due to currency gains from the Russian Rouble.

Carlsberg CEO Jørgen Buhl Rasmussen said: "We achieved higher margins in all three regions for the first six months showing that we are clearly on-track to meet our medium-term margin targets. We will continue to balance our plans to improve efficiency and margins with our ambitions to drive top-line growth." 

Rasmussen highlighted the firm's strong growth in Asia, where volume sales grew by 40% off a low base for the half-year and the brewer reported strong market share gains.

For the full press release, click here.