Danish brewer Carlsberg A/S said that it improved on its already leading position in Russia as it worked on boosting its presence and brands visibility.
According to Carlsbergs statement, the companys Russian volume share improved from 36.5% in the previous period to 37.9% in the third quarter of the fiscal year. The company also reported a nearly 5% decline in its net profit over the period, saying that it was affected by falling currencies such as the ruble.
The company said in a statement: “While the region offers long-term growth opportunities, the greater uncertainty and volatility has required a detailed contingency and scenario planning.”
Carlsberg shared that its net profit during the third quarter declined from DKK2.21 billion last year to DKK2.10 billion ($350 million) because of the negative effect of falling currencies in markets such as Russia, Ukraine, Belarus and Norway. The company also explained that its operating profit, excluding special items, amounted to DKK3.39 billion. The companys revenue rose by 4% and reached DKK18.12 billion, beating estimates of DKK17.8 billion.
The companys earnings before interest, taxes and one-time items amounted do DKK3.39 billion ($570 million) over the third fiscal quarter. This result was higher than analysts projections of DKK3.36 billion.
Apart from announcing its quarterly results, the company also reaffirmed its latest full-year projection, saying that it expects less than a 10% decline in its profit for 2014. In the summer, Carlsberg issued a warning that its earnings would be affected more than it had initially forecast by reduced customer spending in Russia.
Alm. Brand analyst Michael Friis Jorgensen commented for Reuters: “As currencies look right now, the growth expected in earnings next year from efficiency savings in Russia and in Europe is more or less wiped out due to the depreciation of the ruble.”
Carlsberg A/S added 2.45% to trade at DKK522.00 per share at 12:41 GMT, marking a one year change of -5.00%. The company is valued at DKK78.64 billion based on Fridays close. According to the Financial Times, the 26 analysts offering 12-month price targets for Carlsberg A/S have a median target of DKK547.50, with a high estimate of DKK790.00 and a low estimate of DKK465.00. The median estimate represents a 7.46% increase from the previous close of DKK509.50.
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