DENMARK: Slower Western Europe, S&N buy hampers Carlsberg Q1
Carlsberg has posted a slower start to 2008, in what the brewer has described as a "modest" quarter traditionally.
The Denmark-based company said today (7 May) that operating profit in the first three months of 2008 hit DKK381m (US$78.8m) compared to DKK345m a year earlier.
Net sales came in 6% up on Q1, at DKK9.43bn, with beer volumes increasing to 16.8m hectolitres from 16.0m.
The brewer delivered a net loss, however, of DKK87m, compared to a profit of DKK86m a year earlier, as a result of Carlsberg's joint acquisition of Scottish & Newcastle, which completed in the quarter.
"The Western European markets showed a general slowdown on volume terms, while the growth markets in Eastern Europe and Asia developed strongly, with Russia experiencing slightly higher demand compared to the record high level in first quarter last year, and China in particular contributing high organic growth," the company said.
"As a result of seasonal fluctuations in demand for beer in the regions in which Carlsberg operates, the first quarter is expected to account for only a modest share of the overall profit for the year."
In Western Europe, sales volumes slipped by 1% due to a "slight decline" in the UK and Germany.
Baltic Beverages Holding, Carlsberg's Eastern European and Russian unit, saw volumes climb by 9%, thanks to a mild winter in the region. Operating profit slipped at BBH, however, by 11% following "considerable investments" in the business.
In Asia, Carlsberg's volumes climbed 17%, with operating profit rising by 45%. "The increase in earnings can primarily be attributed to higher profits in Malaysia after last year's changes to the business model, which has successfully repositioned the business," the company said.
Company president and CEO, Jørgen Buhl Rasmussen, said: "Developments in the quarter underline the fact that we have a strong business, equipped in every way for the challenges and opportunities which lie ahead after acquisition of the activities of S&N."
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