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Carlsberg shares climb as it lifts profit forecast
The Danish brewer has lifted its profit guidance for the full year following a “solid business performance” in the first half of 2023.
The world’s third-biggest brewer said it now expects organic operating profit growth this year of between 4% -7%, compared with a previous estimate that ranged from a fall of 2% to an increase of 5%.
“Based on solid business performance year to date and our expectations for the remainder of the year, we are upgrading our full-year earnings expectations for 2023,” the company said in a statement.
Organic sales grew 11%, and organic operating profit crept up by 5.2% in the first six months of rhe year.
As a result of the lifted forecast Carlsberg’s shares climbed by 1.6% this week, with the broader Copenhagen benchmark index down 0.7%.
The beer company also said it will start a DKr1bn (US$146m) share buyback beginning today, Wednesday 16 August.
The reappraised forecast comes on the back of an unusually busy first half of the year for the Copenhagen-based brewer.
In May, Carlsberg agreed to pay a hefty €50million fine to draw a line under historic price-fixing allegations, which the brewer continues to refute. Following a legal case which lasted for 11 years Carlsberg made the decision to settle so that it could “focus on its core business” after the case had required “an enormous amount of time and financial resources,” according to an official statement.
Then in June, the brewer finally sold its business in Russia after dragging its heels, citing the “150 work streams and DKK150 million (£17.3m) in brewery equipment investments” that needed to be considered ahead of finalising a deal.
Carlsberg also scrambled to reduce the alcohol content in its beers ahead of the UK duty reforms that kicked in earlier this month. Carlsberg’s flagship beer will be reduced from 3.8% ABV to 3.4% ABV.
This lower alcohol level means Carlsberg will pay £9.27 for every litre of its Danish Pilsner (because it is under 3.5% ABV), compared with the £20.01 per litre it would have had to cough up had its beer remained between 3.5% and 8.5% ABV.
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