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6 months ago
Carlsberg's Q4 sales miss expectations, Russian ban to dent earnings
February 8, 2017 / 10:06 AM / 6 months ago

Carlsberg's Q4 sales miss expectations, Russian ban to dent earnings

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Football Soccer - England v Wales - EURO 2016 - Group B - Stade Bollaert-Delelis, Lens, France - 16/6/16 A view of a Carlsberg 0.5% cup before the gameCarl Recine/File Photo

COPENHAGEN (Reuters) - Carlsberg's (CARLb.CO) sales fell and missed expectations in each of its three regions in the fourth quarter and the Danish brewer said stricter rules governing how alcoholic drinks are sold in Russia will dent earnings this year.

Sales in Eastern Europe fell 2.5 percent to 2.33 billion Danish crowns ($334.11 million), the world's third largest brewer said in a trading statement on Wednesday, compared with analyst expectations for a 7 percent gain.

Carlsberg said that a law in Russia limiting the size of a plastic beer bottle to no more than 1.5 liter as part of efforts to curb alcohol abuse could dent beer sales in the country by 5 percent this year.

"On top of that there could be further market decline," Chief Executive Cees 't Hart told reporters on a conference call, without giving details.

Russia is the main market in Carlsberg's Eastern Europe region that provides around a fifth of the brewer's sales.

Russia has long been a problematic market for brewers due to sales and advertising restrictions and tax hikes designed to curb drinking, but in November Carlsberg had reported a sharp rise in third-quarter sales, which resulted in it winning market share from its bigger global rivals Anheuser Busch Inbev (ABI.BR) and Heineken (HEIN.AS).

Carlsberg has struggled in Russia since it took control of the country's largest beer brand Baltika in 2008 due to tighter alcohol regulations and a weak economy.

Carlsberg said it expected its overall operating profit in percentage terms to rise by mid-single digit this year.

The company gave no quarterly earning figures but its full year net profit came in at 4.49 billion Danish crowns ($642.91 million), slightly higher than the 4.46 billion expected by analysts.

The brewer proposed a dividend of 10 crowns per share for 2016, slightly higher than the 9.47 crowns expected by analysts.

($1 = 6.9839 Danish crowns)

Reporting by Teis Jensen; Editing by Sunil Nair and Louise Heavens

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