Reuters: Carlsberg (OTC:CABGY) said increasing raw material prices will hurt profitability in the second half of the year.
The world’s third-largest brewer says reopened bars and restaurants improved second-quarter revenue.
“So far, rising inflation hasn’t affected our numbers,” CEO Cees ‘t Hart remarked.
“When people spend less on holidays, automobiles, or a new fridge, they want a premium beer,” he said.
The company, which makes Kronenbourg 1664, Tuborg, and Somersby, raised its earnings growth projection last week on strong European and Asian performances.
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The company’s volumes expanded organically by 8.7% in the quarter, with sales reaching 20.51 billion Danish crowns ($2.81 billion), compared to 21.6 billion predicted by analysts.
“We’re ahead of pre-pandemic levels, but gloomy clouds loom,” ‘t Hart added. Second-half input costs will be fully felt.
The company thinks that organic profit growth will be in the “high single-digits” for the whole year, down from 32% in the first half.
Heineken (OTC: HEINY) reported this month that despite rising costs of living, consumers purchased more beer, but that rising expenses would reduce profit margins next year.
Carlsberg rose 1.4% at 0726 GMT. Since early March, the stock has gained 25%.
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Carlsberg said in March that it would sell its business in Russia. This is part of a trend of Western companies leaving Russia since Russia invaded Ukraine.
Hart said the sale would likely be completed 12 months after the divestment announcement.
The corporation wrote down its Russian business by 9.6 billion crowns on Wednesday, resulting in a first-half net loss of 5.28 billion crowns.
$1 = 7.30488 Danish crowns
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