DENMARK: Carlsberg nine-month hit by Chang fall-out
Carlsberg has posted a nine-month dip in profits, thanks in part to costs associated with its partnership dispute with Chang in Thailand. The Danish brewer said today (8 November) that net revenue for the first nine months of this year to 30 September climbed, however, by 5% to DKK 28.5bn (US$4.5bn), fuelled by continued growth at Baltic Beverages Holding (BBH) and the other Eastern European businesses.
Operating profit (Earnings before interest and taxation) for the group as a whole was DKK 2.9bn in the period, a fall against last year blamed on a drop in earnings from other activities (gains on sales of properties) by DKK 406m.
Total beer sales volumes for the first nine months were 10% up on the same period a year earlier, which includes 4% organic growth, with positive contributions from BBH, Eastern Europe and Asia, the company said.
In Western Europe, beer sales by volume rose very slightly in the period by 3% to 21.2m hectolitres, although net revenue dipped by 3% to DKK19.4bn. Operating profit fell in the region by 4% to DKK1.75bn. While Carlsberg warned that the UK market is seeing intense competition and continued growth in the off-trade at the expense of the on-trade, the company noted that BBH enjoyed another quarter of progress and growth, with beer sales for the first nine months growing by 13% to 16m hl.
The arbitrations between Carlsberg and Chang in Thailand were settled during the third quarter, ending more than two years of dispute between the parties. Carlsberg, which agreed to pay Chang US$120m to divide up their jointly-held assets, said that it now sees considerable market potential in Asia and will continue its expansion strategy in the region.
Based on the results for the first nine months, the brewer said that its expectations for 2005 operating profit are unchanged, with a forecast growth in net revenue of around DKK38bn. Operating profit (EBIT) from beverage activities is, as previously announced, expected to be around DKK 3.4bn, an increase of around 14% on 2004.
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