Carlsberg Earnings Exceed Estimates on Europe, Asia

Carlsberg A/S, the world’s fourth-biggest brewer, reported first-quarter profit that beat analysts’ predictions as it sold more beer in western Europe and Asia.

Earnings before interest, taxes and one-time items rose 46 percent from a year earlier to 661 million Danish kroner ($99 million), the Copenhagen-based company said in a statement Tuesday. Analysts on average had estimated profit of 588 million kroner. Sales rose 4 percent on an organic basis, which excludes currency and acquisition effects.

As Russia’s biggest brewer, Carlsberg has been hit by political instability and economic turmoil in the country and last year started to reduce output there to counter weaker demand and a declining ruble. This year, the ruble has rallied 14 percent against the dollar, providing some relief to most international companies operating in Russia.

Carlsberg estimated that the Russian beer market contracted by 9 percent in the quarter. Group beer volume declined organically by 1 percent as a 16 percent drop in eastern Europe was partly offset by growth of 4 percent in Asia and 5 percent in western Europe, where the company was helped by market share gains and an early Easter.

The brewer’s first quarter “always needs to be read with a pinch of salt due to the seasonality of the business” both in western Europe and Russia, analysts at Berenberg said in a note. “Eastern Europe was disappointing, with the Russia beer market still heavily down.”

The maker of Tuborg beer reiterated that it expects “mid-to high-single-digit” organic operating-profit growth in 2015.

“We achieved strong overall market-share performance,” Chief Executive Officer Joergen Buhl Rasmussen said in the statement. Rasmussen is due to hand the reins to the brewer’s first non-Danish CEO, Cees ’t Hart, next month.

(Source: Bloomberg)