Carlsberg 3Q Net Loss DKK4.5 Billion

  By Christina Zander

STOCKHOLM--Danish brewer Carlsberg on Wednesday presented plans to improve profits as it reported a third-quarter loss due to write offs in its struggling Russian and Chinese business.

The new cost-cutting program contains impairment and restructuring costs of 10 billion Danish kronor ($1.44 billion) for the 2015 to 2017 period, of which around DKK8.5 billion will be charged in 2015. It is expected to deliver annual benefits of DKK1.5 billion to DKK2.0 billion by 2018.

"Acknowledging the fact that the profit development of recent years has not been satisfactory, we are taking further steps to prepare the Carlsberg Group for the future," Carlsberg Chief Executive Cees't Hart said in a statement.

The benefits will partly improve the group's profitability and partly be reinvested into the business, subject to the outcome of Carlsberg's strategy review, which will be presented during the first quarter 2016.

The world's fourth-largest brewer said net loss for the three months ended Sept. 30 was DKK4.50 billion compared with a profit of DKK2.10 billion for the same period last year due to one-off costs of DKK7.7 billion, which were mainly related to the impairment of its Russian brands and Eastern assets in China. Analysts polled by FactSet expected a net profit of DKK1.85 billion.

Sales in the third quarter totaled DKK18.30 billion, down from DKK18.12 billion last year. Operating profit before special items was DKK3.47 billion, up from DKK3.39 billion.

Last quarter, Carlsberg cut guidance for its full-year earnings on lower sales in its main markets and said while the organization was cutting costs and improving efficiency, the effects weren't being felt as quickly as planned.

The brewer maintained Wednesday that it expects its organic operating profit to decline slightly in 2015, having previously expected mid- to high-single-digit growth.

Due to the reclassification of one-off items in the U.K. and restructuring costs in the fourth quarter, organic operating profit is expected to be lower than previous expectations, the company said.

Shares closed at DKK576.00 Tuesday.

Write to Christina Zander at Christina.Zander@wsj.com

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(END) Dow Jones Newswires

November 11, 2015 01:49 ET (06:49 GMT)

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