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Carlsberg 2Q Profits Rose 36 Percent |
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Tuesday, 05 August 2008 |
COPENHAGEN, Denmark: Carlsberg A/S on today reported a 36 percent rise in second-quarter net profits, saying stronger sales, particularly in eastern Europe and Asia, helped offset higher raw material prices and allowed it to charge more for its beer.
The world's fifth largest brewer also raised its financial target, saying the company is aiming to increase its operating margins in northern and western Europe to 14-16 percent in the medium term, and to 23-25 percent in eastern Europe. The previous targets were of 10.5 percent and 22.1 percent, respectively.
Gudme Raaschou Bank analyst Stig Nymann said the second quarter report included "nice figures."
He noted the targets for northern and western Europe, saying Carlsberg should aim for the long haul and "work to get these margins further up."
The Carlsberg share soared on the results, rising 9 percent to 415 kroner (€55.63 ;US$86.59) in early Copenhagen trading.
Second-quarter net profit hit 1.4 billion kroner (€188 million; US$293 million), up sharply from around 1 billion kroner in the same three months last year.
Net sales in the quarter reached 17.5 billion kronor, an increase from 12.6 billion kroner in the second quarter in 2007.
"Even in these more challenging times of raw material price increases and consumer uncertainty in some markets around the world, the growth markets in Eastern Europe and Asia remained strong," the group said in a statement.
Carlsberg singled Russia as showing particularly strong volume growth development in the quarter. The Danish brewer now fully controls Russia's biggest beer producer by revenue and volume, Baltic Beverages Holding, or BBH.
The brewer warned that rising raw material prices could continue to have a negative impact on total cost of sales and distribution expenses. Carlsberg said it was focusing "strongly" on raising prices to compensate.
In its outlook for 2008, it said it expects its operating profit "to be in excess" of 8.1 billion kroner (€1.1 billion; US$1.71 billion), and net profits to top 3 billion kroner (€402 million; US$625.75 million).
The company's outlook for the Russian beer market growth is around 5 percent for 2008, it said.
Earlier this year, the Copenhagen-based brewer bought Scottish & Newcastle together with Dutch rival Heineken NV.
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