DENMARK: Carlsberg ups FY forecast on Russia stockpiling

By | 17 December 2009

Carlsberg has raised its full-year earnings forecast after seeing volumes boosted by distributor stockpiling in Russia, ahead of a jump in beer duty tax next month.

Carlsberg, which owns leading Russian brewer Baltika Breweries, said today (17 December) that moves by Russian beer sellers to stock up before the hike will boost its 2009 operating profits to DKK9.3bn (US$1.82bn), compared to previous expectations of at least DKK9bn.

However, while the stock building will have a positive one-off impact on profits in the fourth quarter, it is expected to wipe the same sum off profits in the first quarter of 2010.

Russia's state parliament, the State Duma, has passed a Government plan to triple excise tax on beer in the country from January.

Carlsberg said the subsequent stockpiling is estimated to have a negative impact on working capital of around DKK300m, due to higher accounts receivables. Despite this, Carlsberg said it has maintained a free cash flow outlook of "at least" DKK6.5bn.

Last month, Carlsberg lobbied hard to dissuade Russia's Government from tripling excise tax on beer, ahead of a debate on the proposal in the country's parliament this week.

The firm joined with other brewers to lobby against the plan, which it said would "clearly affect the beer market negatively".

Sectors: Beer & cider

Companies: Carlsberg, Baltika

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