DENMARK: Turnaround in Europe lifts Carlsberg

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Danish brewer Carlsberg has today (9 August) upped its forecast on full-year profits after enjoying a lift in earnings in Western Europe during the first six months of the year.

Carlsberg's operations in Western Europe have suffered in recent months from declining beer consumption in the region but a series of cost-cutting measures and rising sales have given a boost to profits.

The brewer saw operating profit in Western Europe for the six-month period leap by 22% to DKK908m (US$156.6m). Revenues in the region were up 5% as Carlsberg managed to increase its average prices by 2%. Beer volumes remained flat at 13.3m hectolitres but were buoyed by good summer weather and the football World Cup, Carlsberg said.

As a consequence, group operating profit soared 30% to DKK1.7bn, leading Carlsberg to set its full-year profit forecast to DKK3.75bn, up DKK200m from its previous estimate.

Worldwide beer volumes were up 6% after stripping out last year's contributions from South Korean brewer Hite, in which Carlsberg sold its stake in June.

Carlsberg's Eastern European brewing venture, Baltic Beverages Holding, gave a further boost to the results. Carlsberg saw earnings from the business rise as the integration of its breweries in Russia began to take shape.

Last week, BBH, in which Carlsberg and UK brewer Scottish & Newcastle own a 50% stake, posted a 27% leap in EBITDA to EUR273m (US$350m) for the six months to the end of June. Net sales rose in the period by 18% to EUR961m.

In the rest of Eastern Europe, however, Carlsberg saw earnings slump by two-thirds. Sales fell in Poland due to issues with distribution to the off-trade and price competition, the brewer said.

In Asia, profits were up 9% on the back of acquisitions in western China and higher margins in Singapore.

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