Carlsberg profit falls as sanctions hit Russian currency

Danish brewer Carlsberg on Monday reported a drop in third quarter profit as the ruble tumbled amid the fallout of the Ukraine crisis and lower oil prices.
Carlsberg, which has a 37.9 percent market share in Russia, said net profit dropped 4.8 percent to 2.103 billion kroner (283 million euros, $353 million) as revenue rose four percent to 18.12 billion kroner.
"The negative currency impact was due to weaker currencies in several markets, including Russia, Ukraine, Norway and Belarus," the group said in a statement.
Beer volumes in Eastern Europe dropped nine percent as Russian consumers faced an uncertain economic future following Western sanctions against Moscow over its role in the separatist insurgency in eastern Ukraine.
"While the region offers long-term growth opportunities, the greater uncertainty and volatility has required a detailed contingency and scenario planning," Carlsberg said.
As part of the country's battle against alcoholism Russia has tried to curb beer consumption by cracking down on marketing and banning sales of beer in kiosks and late at night.
The Copenhagen-based company said that despite the currency decline and falling sales in Russia it had continued to invest in the marketing of its brands there, including the market-leading Baltika.
"These activities included activation of sponsorships such as the Continental Hockey League and local football teams, with the Baltika brand activated in stadium and TV commercials," it said
The East European decline was partly offset by a 61 percent jump in Asian revenue following acquisitions and strong sales of premium brands.
The group reiterated its full-year expectations of a "mid to high single digit percentage" decline in net profit excluding one-off items.
"Carlsberg is delivering an acceptable result. Operationally, management has done well in difficult markets," Michael Friis Joergensen, an analyst at Alm Brand, told Danish business daily Boersen.
Shares in the company were 2.36 percent higher in midday trading on the Copenhagen bourse, where the main index was up by 0.22 percent.