Danish brewer Carlsberg on Wednesday reported a worse-than-expected third-quarter result as bad summer weather in Northern and Western Europe hit its beer volumes. It also saw a decline in its important Russian market.
Still, the company relieved investors by reiterating its operating profit forecast for the full year 2011, and shares rose some 5 percent to 385.30 kroner ($71.30) on the Copenhagen stock exchange.
Net profit for the quarter came to 2 billion kroner ($370 million), up slightly from 1.9 billion kroner for the same three months a year ago, but 2010 was weighed down by heavy restructuring costs in Sweden, Denmark, Norway, Britain and the disposal of a logistics business in France.
The company blamed most of the downturn on poor weather in Northern and Western Europe, especially in the month of July, which last year gave the company an upswing as unusually warm weather attracted hordes of thirsty beer-drinkers.
It also pointed to a declining market in Russia, where local and international brands are putting up stiff competition.
Sales for the quarter dropped to 17.4 billion kroner, compared with 17.7 billion a year earlier.
"2011 has been a challenging year and we have faced headwinds from rising input costs, adverse weather conditions and soft trading conditions in our largest market," CEO Joergen Buhl Rasmussen said.
Going forward, he said his company plans to "speed up structural initiatives to become even more efficient and customer focused and we will continue to drive value in the category."
Sydbank analyst Morten Imsgard said that overall there wasn't much positive news in the report, noting that what is happening in Russia "is a serious situation for Carlsberg."
He also added that he had "not expected such a large swing in the results due to sluggish summer weather."
Still, he noted that the markets seemed to have been comforted by the full-year forecast reiteration and that the numbers were not as bad as they could have been.