DENMARK: Tax gains boost Carlsberg FY profit

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One-off tax gains lifted Carlsberg to a 23% rise in net profit for 2008, but the Danish brewer warned of falling beer sales in 2009.

Shares in Carlsberg leapt by 11% this morning (18 February) after the group reported net earnings of DKK3.2bn (US$540m) for the 12 months of 2008, up from DKK2.6bn in 2007.

The brewer's net earnings benefited significantly from one-off tax gains, mainly due to lower corporate tax payments in Russia, which equated to a rate of -11%. Without this, charges would have caused a fall in net earnings for the year. 

Higher beer prices boosted Carlsberg's revenue and operating profit in 2008. Operating profit rose by more than 50% to nearly DKK8bn, while sales by value increased by a third to nearly DKK60bn.

The group said that its subsidiary in Eastern Europe, Baltic Beverages Holding, has increased market share in Russia, from 37.6% to 38.3%, in an overall flat beer sector.

Carlsberg provided a more downbeat assessment for 2009, however, predicting falling beer sales across Westerna and Eastern Europe.

In its outlook, the brewer said that it still expected to grow operatin profit and revenue, to at least DKK9bn and DKK63bn respectively.

But, CEO Jørgen Buhl Rasmussen said the firm had a defensive strategy for the year ahead: "A global economic recession is now a reality. Consequently, our focus in 2009 will be on increasing cash flow and protecting earnings, cost control, significantly reducing capital expenditure, and accelerating debt repayment."

The brewer said that it has "contingency plans" in place to react to further severe market downturns and would take "all necessary actions" to protect its business.

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