Carlsberg, the world's sixth-largest brewer, delivered a double surprise on Wednesday, by upgrading its earnings forecast for the full year and revealing that soft drinks were mainly responsible for a sharp increase in sales for the first six months of the financial year.
Turnover for the period between October 1999 and March 2000 rose 10 percent to DKr16bn ($2.06bn). "The increase is mainly attributable to soft drink sales in Coca-Cola Nordic Beverages and the inclusion of Iceland in the figures," Carlsberg said.
The upturn in soft drinks marks a significant turnround for Carlsberg, as it is the first time that CCNB - a joint venture with Coca-Cola - has registered a profit since its creation three years ago.
However, the relationship with the US soft drinks group is being reassessed following Carlsberg's acquisition of the Nordic bottling and distribution rights for Pepsi-Cola at the end of May. Meanwhile, Carlsberg said its international beer business had shown improvements but that a continued decline in Danish beer consumption had resulted in lower earnings in its home market.
The company blamed a 5 percent decline in domestic beer consumption over the six-month period on Germany's lower excise duties. Danes frequently cross the border to purchase beer in large quantities, and Carlsberg estimates that about 18 percent of the beer consumed in Denmark is purchased in Germany.
Although Wednesday's figures showed an 11 percent increase in pretax profit to DKr757m, this was lower than market expectations of DKr870m. Carlsberg said it expected full-year operating profit to exceed the DKr1.7bn recorded last year. Although the company does not break down sales on a regional basis, Carlsberg said the results achieved by its UK subsidiary, Carlsberg-Tetley, were "satisfactory and in line with expectations". Reuters
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