CABGY Carlsburg AS (PK)

By Dominic Chopping

Carlsberg A/S (CARL-A.KO) on Wednesday posted a 4% drop in third-quarter revenue amid a continued tough foreign-exchange environment and as overall beer sales fell, but the Danish brewer lifted its full-year financial guidance after a good performance in Eastern Europe and as its efficiency programs began to yield benefits faster than expected.

In a quarterly trading update, the world's fourth-largest brewer reported third-quarter revenue of 17.53 billion Danish kroner ($2.65 billion), compared with DKK18.3 billion a year earlier, weighed by a negative currency impact of 4%. Analysts polled by FactSet had expected revenue of DKK17.97 billion.

The company now expects organic operating profit growth of around 5% in 2016, having previously seen low-single-digit percentages, while it expects a negative translation impact of DKK550 million, having previously forecast DKK600 million.

"Our value management approach, which targets the optimal balance between market share, gross margin and earnings, continues to progress well," said Chief Executive Cees 't Hart. "In addition, our Eastern European business delivered a good set of results in the quarter, ahead of our expectations. Consequently, we upgrade our 2016 earnings expectations."

In the challenging Eastern European market, net revenue grew organically by 16% and on a reported basis by 5%, boosted by price increases, volume growth due to market share gains, and warm weather. The region saw 10% volume growth. Carlsberg estimates that the Eastern European beer markets grew slightly in the quarter but it cautioned that the consumer environment in the region continues to be challenging.

In Asia, net revenue grew organically by 2%, but reported net revenue fell 6% due to a negative currency impact, mainly from China and Malaysia, and the disposal of Carlsberg Malawi.

Net revenue in Western Europe declined organically by 4% and the brewer estimates the overall Western European beer market grew 1%-2% in the quarter.

-Write to Dominic Chopping at dominic.chopping@wsj.com; Twitter: @domchopping @WSJNordics

(END) Dow Jones Newswires

November 09, 2016 02:13 ET (07:13 GMT)

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