Carlsberg issues profit warning on Russia weakness

(EPA)

Carlsberg issued another profit warning today as sales in Russia — more than a third of its business — were hit by the Ukraine conflict.

The Danish brewer lowered its profit guidance for a second time this year and said it expects operating profit to fall by low-to mid-single digit percentage points.

At its half year results today, chief executive Jorgen Buhl Rasmussen said: “We believe the Eastern European beer markets will be impacted further as consumers are facing increased challenges.”

Shares tumbled nearly 5 per cent after the warning despite better than expected operating profits of 3.6 billion kroner (£386 million), up 6 per cent in the second quarter.

Even the world’s third-biggest brewer could not muster a strong outlook for the rest of the year.

Dutch based Heineken issued a forecast-beating first half with earnings up nearly 10 per cent compared to the previous year to €1.45 billion (£1.16 billion) — well ahead of analyst expectations. But chief executive Jean-François van Boxmeer said the “economic outlook remains mixed”.

Problems in the Russian region have also affected the likes of fizzy drink bottler Coca-Cola HBC and sportswear brand adidas.

Amin Alkhatib , alcoholic drinks industry analyst at Euromonitor International, said: "Heineken showed a surprise performance as it exceeded expectations in its half year results from its outstanding performance in Western Europe and the Americas.

"However, Carlsberg’s half year showed no surprise as volume sales reflected a dismal performance impacted by the Russian market, but better than expected profit growths across the board."