Carlsberg found market share growth in Russia

Carlsberg found market share growth in Russia

Carlsberg's first-half results were “mixed”, but analysts have been impressed with the brewer's performance in the difficult Russian market.

The Danish group announced a 3.8%% rise in H1 group sales today (15 August), with total volumes growth up 1%. But despite an operating profit fall of 11% and an EBIT that came in 9% below consensus, analysts UBS noted Carlsberg is “sounding more positive in the Russian beer market than its competitors” with 3% market growth.

The analysts said Carlsberg was helped by taking back the Holsten brand in June and accelerated price/mix growth in Q2.

The group has been hit by major hikes in beer taxes in Russia, with the latest one landing in January. But in May, the company's CEO Jørgen Buhl Rasmussen said two price increases by the company last year had “more or less covered the duty increase impact”.

Analysts Bernstein Research branded Carlsberg's latest numbers “messy”, but was happy to see stabilisation in Russia. The group's earnings per share could end the year slightly higher than expected, Bernstein added, because of a lower cost of funding.

The analysts also noted contraction in the brewer's margins, which the company blamed on marketing spend ahead of June's Euro 2012 football tournament and higher logistics costs. Bernstein said the key question is how much of the contraction is due to the the ad spend, which should reverse in the second half of the year.

Earlier this month Bernstein predicted Carlsberg's sales would be hit by bad weather in Q2.