Carlsberg suffers profits hit on Russia alcohol crackdown
Net profits sank 70% to 1.3 billion Danish krone (£155 million) last year.
Profits at Carlsberg have plunged more than 70% after a crackdown on alcohol abuse in Russia took the fizz out of beer sales.
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The Tuborg and Somersby Cider-maker saw annual net profits sink to 1.3 billion Danish krone (£155 million) last year, down from 4.5 billion krone (£536.1 million) as Russian beer volumes dropped 14%.
The Copenhagen-based firm said it was hit by 4.8 billion krone (£571.8 million) charge linked to its Russian Baltika brand.
Russia is a key market for Carlsberg, but a nationwide cap on plastic beer bottles at 1.5 litres has taken its toll on performance.
Annual pre-tax profits also made for bleak reading, dropping 51% to 3.5 billion krone (£416.9 million) over the period, after it was confronted by a 4% drop in total beer volumes to 112.4 million hectolitres.
Chief executive Cees’t Hart said the group was pencilling in a single-digit rise in operating profit this year and had boosted the 2017 dividend by 60%.
He said: “We delivered a strong set of results for 2017, fuelled by disciplined execution of our efficiency programme – Funding The Journey – which we now believe will deliver around 2.3 billion krone (£274.2 million), well above our initial expectations of 1.5 billion to 2 billion krone (£178.8 million to £238.4 million).
“During the year, we invested 500 million krone (£59.6 million) in our strategic growth priorities, which should lead to healthy and sustainable top- and bottom-line growth going forward.”
Carlsberg, which bought London Fields Brewery in July, saw group revenues slip 1% to 61.8 billion krone (£7.4 billion) in 2017.
Its UK performance also came under pressure last year, dropping 6% as the firm failed to churn out the same sale volumes seen during the Euro 2016 football tournament.