LONDON – Carlsberg, the biggest brewer in Russia, doubled its full-year profit forecast after reporting second-quarter earnings Tuesday that beat analysts’ estimates.
Carlsberg now expects net income growth of 40 percent, up from an earlier forecast of 20 percent, it said in a statement.
The Copenhagen-based brewer predicts 2010 operating profit at about 10 billion Danish kroner ($1.7 billion). It had previously forecast that profit would be in line with the 9.4 billion kroner earned last year.
“It wasn’t that big a surprise: If you look at what the ruble had done this quarter, it was virtually inevitable,” said Trevor Stirling, a London-based analyst at Sanford C. Bernstein.
The ruble has advanced 10 percent against the Danish krone this year. The maker of Tuborg and Baltika beer passed on the effect of a 200 percent tax increase to the Russian consumer by the end of the period.
Carlsberg, the world’s fourth-largest beermaker, controls about 40 percent of the Russian market. It faces competition from Anheuser-Busch InBev, the world’s largest brewer, which started selling Bud in Russia in the first half of the year. AB InBev last week said it had seen “encouraging” initial results. The Stella Artois maker has passed on all of the tax increase to consumers.
Russia said Aug. 5 that it would ban grain exports amid the worst drought in at least 50 years, driving Carlsberg’s share price down 5 percent on concern that barley, wheat and other ingredients to make beer may rise, forcing the company to increase prices.
Commodity fluctuations “will not have any material impact on the group next year,” chief executive officer Joergen Buhl Rasmussen said on a conference call. He declined to discuss how much barley the company had hedged, but said it was sufficient to “give us comfort.”
A Message from The Moscow Times:
Dear readers,
We are facing unprecedented challenges. Russia's Prosecutor General's Office has designated The Moscow Times as an "undesirable" organization, criminalizing our work and putting our staff at risk of prosecution. This follows our earlier unjust labeling as a "foreign agent."
These actions are direct attempts to silence independent journalism in Russia. The authorities claim our work "discredits the decisions of the Russian leadership." We see things differently: we strive to provide accurate, unbiased reporting on Russia.
We, the journalists of The Moscow Times, refuse to be silenced. But to continue our work, we need your help.
Your support, no matter how small, makes a world of difference. If you can, please support us monthly starting from just $2. It's quick to set up, and every contribution makes a significant impact.
By supporting The Moscow Times, you're defending open, independent journalism in the face of repression. Thank you for standing with us.
Remind me later.
