In the Spotlight - Carlsberg's Russian return

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Its first-half results may not have been overly impressive, but Carlsberg will be reassured by the encouraging noises from investors and analysts over a turnaround in Russia.


The Danish brewer reported a 43.2% leap in H1 net profits yesterday (15 August). That, however, was down to the US$250m sale of its former Copenhagen brewery, as operating profits were down 14%.

But it wasn't net profits that pushed Carlsberg's shares up 2% yesterday. That was down to signs of a resurgent beer market in Russia, which, together with Ukraine, accounts for about 40% of the company's earnings.

“Q2 results have provided further support to our view that Russian beer volumes are coming back into growth after three years of decline,” analysts Nomura said in a note today.

Reuters expounded on a similar theme in an article headlined: “Years of Russian decline coming to an end.” It also pointing out that Carlsberg has managed to grab a bigger market share in both Russia and Europe.

"The rising market share in both Russia and northern and western Europe is the positive (element) in the second-quarter result," it quoted an analyst as saying.

Meanwhile, the Wall Street Journal said Carlsberg's strong performance in Asia was a marker for the future and highlighted the brewer's ten-year project to build its second-largest brewery in the south of China.

With such mixed results, it's no surprise to hear some grumbles about Carlsberg's direction. Most of the complaints were about the brewer's performance in Europe, where rain put the skids on possible growth. 

“The results are disappointing, and Carlsberg is only able to keep its guidance unchanged because of better-than-expected foreign exchange,” said an analyst at Canaccord Genuity quoted in Business Week.

Even football couldn't save Carlsberg in Europe. Reuters said that while the Euro 2012 tournament had saved SABMiller's skin in results released last month, Carlsberg, which sponsored the tournament, was not so lucky and the wet weather outweighed Europe's thirst for beer and sport.

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