Carlsberg says profit slumps on Russian alcoholism curb
Net profit in the second quarter fell to 2.074 billion kroner (278 million euros, $372 million) from 3.355 billion kroner 12 months ago.
In the same period last year, results were boosted by the sale of the company’s Copenhagen brewery site.
But the latest figures fell short of the 2.15-billion-kroner expectation by analysts polled by Dow Jones Newswires.
“The ongoing challenging market conditions underpin the importance of our continued efforts to make our business more efficient,” Joergen Buhl Rasmussen said in a statement.
Carlsberg has sought to grow sales by expanding outside western markets — where sales have stalled — into eastern Europe, and bought the remaining minority stake in Russia’s Baltika Breweries last year.
But sales there have been hit by government efforts to battle the country’s drink problem, which have included a ban on sales in kiosks and on late night sales, as well as marketing restrictions.
“It has taken longer than anticipated for consumers to adapt to the changed retail landscape caused by the closure of non-permanent outlets,” Buhl Rasmussen said.
Slowing economic growth in Russia and a drop in consumer sentiment were also weighing on sales, he added.
Sales were also hurt by poor weather in some of the group’s key markets towards the end of the quarter.
The northern hemisphere was hit by a long hard winter this year which ate into the strong spring and summer period for the sale of beer.
Net revenue rose 1.6 percent to 19.64 billion kroner, which was in line with expectations.
Carlsberg said it still expected to post a full-year operating profit of about 10 billion kroner and for adjusted net profit to increase by “a mid-single-digit percentage.”