Carlsberg share price dips as Russian tension takes the fizz out of profits
Copenhagen-listed brewer Carlsberg saw its shares fall as much as 4.6 per cent during trading yesterday after warning its 2014 profit would drop due to the deteriorating Russian market.
The Danish firm, which generates 35 per cent of its profits from Russia, said it now expected operating profit to fall by low- to mid-single digit percentages for the full year due to the deepening tensions between Russia and the west and the resulting pressure on the Russian economy.
“We believe the Eastern European beer markets will be impacted further as consumers are facing increased challenges and this will impact the group’s profits negatively this year,” said chief executive Jorgen Rasmussen. “We will continue to do what is right for our business long-term, and this includes investing in our brands, keeping commercial activities at a high level and at the same time balancing value and volume. But we will also make tough decisions and adapt the cost structure to ensure that we maintain a strong and very profitable Eastern European business.”
Despite its gloomy outlook, Carlsberg said revenues rose four per cent to 32.1bn Danish crowns (£3.44bn) in the second quarter and operating profit, which rose six per cent to 3.6bn Danish crowns in the second quarter. Shares closed down 2.5 per cent at 551 Danish crowns.