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| Carlsberg Misses Estimates, Falls Most in Six Months |
| Copenhagen, 10.11.2010 |
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| By Clementine Fletcher
(Updates with analyst’s comment in sixth paragraph, CEO in ninth, 17th, 19th paragraphs.)
Nov. 9 (Bloomberg) -- Carlsberg A/S, the maker of Tuborg and Baltika beer, fell the most in six months in Copenhagen trading after third-quarter profit missed estimates and the company said it will raise prices because of rising costs.
Net income was 1.95 billion kroner ($363 million), the Danish brewer said today. That was less than the 2.17 billion- kroner average estimate of 18 analysts surveyed by Bloomberg. The shares fell as much as 5.7 percent, the most since May 7.
Rising expenses for commodities including malt and barley may lead to higher prices and “significantly lower” earnings in eastern Europe, where operating profit increased 27 percent in the third quarter, Carlsberg said. The region accounts for 31 percent of the brewer’s revenue and more than half its profitability. Beer markets in northern and western Europe declined “slightly,” the company also said.
“Our expectations of a challenging fourth quarter were confirmed,” Trevor Stirling, a London-based analyst at Sanford C. Bernstein, said today in a note. “They face significant pressures on input costs in 2011.”
The shares traded at 567.5 kroner as of 1:22 p.m. in Copenhagen, down 27.5 kroner, or 4.6 percent.
So-called organic net revenue, which excludes the effect of acquisitions and disposals, grew 2 percent in the third quarter, helped by improving sales in eastern Europe.
Malt, Barley
“While we see signs of the market recovering in the important eastern Europe region, conditions remain challenging in several northern and western European markets,” Chief Executive Officer Joergen Buhl Rasmussen said in the statement. “Looking forward, we will be impacted by rising input costs and will therefore have to increase sales prices.”
Rasmussen said expenses for malt and barley will increase after a heatwave and fires across the region destroyed crops.
“It’s very hard to hedge” in eastern Europe, the CEO said. “I’d say that the price and costs of the raw materials have gone up more than we had visibility for.”
Carlsberg said it lost market share in Russia, where the company is the biggest brewer, as companies including Budweiser maker Anheuser-Busch InBev NV stepped up competition.
“There will be some concern over the share loss in Russia,” said Simon Hales, an analyst at Evolution Securities in London. “Winning this back may cost margin.”
Marketing Costs
Carlsberg said it has increased marketing costs “by double-digit percentages” and will continue to invest in promotional spend across all its regions.
Fourth-quarter earnings in eastern Europe will also be affected by a surge in sales in the same period a year earlier as consumer stocked up on beer before the Russian government increased taxes on Jan. 1.
Still, Carlsberg said it now expects a “mid single-digit” percentage decline in the Russian beer market, having forecast a “high single-digit” decline.
The company also raised its full-year forecast, saying it expects to report full-year operating profit of more than 10 billion kroner compared with a previous estimate of about 10 billion kroner. It maintained its target for net profit growth of more than 40 percent for 2010.
“Focus today is likely to be on the outlook statement, which is more cautious than in previous quarters,” Hales said.
Operating profit, excluding some items, rose to 4.2 billion kroner in the third quarter, an increase of 16 percent excluding acquisitions and disposals, Carlsberg said.
The volume of beer sold, on an organic basis, rose 3 percent in the quarter helped by favorably warm weather in northern and western Europe and strong sales in Asia. All three regions saw growth in the amount of beer sold. Carlsberg gained market share in most Asian markets, while its share fell 80 basis points in Russia over nine months.
--Editors: Paul Jarvis, Celeste Perri.
November 9.10.2010 odkaz na stránku |
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Address : Euro-Brew Ltd., Hlboká 22, 917 01 Trnava, Slovakia
Tel. : +421 33 53 418 53, Fax : +421 33 53 418 52, E-mail : info@eurobrew.sk |
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