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UPDATE 3-Carlsberg sees no let up in Asian thirst for beer
May 7, 2013 / 5:51 AM / in 5 years

UPDATE 3-Carlsberg sees no let up in Asian thirst for beer

* Q1 operating profit 661 mln DKK vs 626 mln forecast

* Sales 13.3 bln DKK vs 12.77 bln forecast

* Says sees 2013 Asia growth at same level as in 2012

* Shares up 0.9 pct after an opening 5.5 pct surge (Recasts, adds CEO comments about Asia, context on Asian market, share price)

By Mette Fraende

COPENHAGEN, May 7 (Reuters) - Carlsberg sees no sign of slowing growth in Asia after a 13 percent rise in revenue in the region helped the world’s fourth-biggest brewer beat profit forecasts.

The Danish company said sales in Asia accounted for nearly 20 percent of group revenue in the quarter, approaching eastern Europe sales of 22 percent, and cushioning sluggish mature European markets and a decline in former growth driver, Russia.

Companies ranging from brewers to carmakers and luxury fashion labels have pinned their hopes on Asia’s growing middle classes to offset weak demand in Europe and the United States.

But with the world’s second largest economy, China, slowing, investors question how long and how well demand will hold up.

“I see no reason that the picture from 2012 should change significantly in 2013,” Chief Executive Jorgen Buhl Rasmussen told Reuters after the result.

In a Reuters poll, analysts on average forecast the brewer will report a 15 percent rise in Asia revenue this year.

Carlsberg, whose brands include Baltika, Tuborg, Kronenbourg and Holsten Pilsner, last year reported a 33 percent rise in Asia net revenue compared with 2011.

ASIAN THIRST

The rise in Asia revenue in the quarter to end March was helped by strong beer sales in countries such as Vietnam, Cambodia and India, as well as Carlsberg’s increased ownership of the Chongqing Jianiang Brewery joint venture in China.

“Asia is the new growth driver,” said Nykredit analyst Ricky Rasmussen. “The company exceeds expectations in all three regions, and they are gaining market share,” Rasmussen said.

Meanwhile, mature Western European beer markets have been hurt by sluggish consumer demand following years of financial crisis.

In Russia, Carlsberg spent years building up a market-leading position in the hope its burgeoning middle classes could help cut its reliance on Western Europe.

But growth rates have been hurt by government measures to curb alcohol abuse.

Heineken, the world’s third largest brewer, recently said austerity hit Europe and inflation in Nigeria had lowered its expectations for growth this year, after its beer sales fell in every region except Asia.

In the first quarter, Carlsberg reported a 5 percent rise in beer volumes overall. The first quarter is traditionally the smallest quarter of the year in terms of volume.

“This is a very good start to the year for Carlsberg,” said Sydbank analyst Morten Imsgard.

Western Europe beer markets fell by about 2 percent, while the Russian beer market declined by mid-single digit percentages, not offering further details.

Carlsberg said its market share in Russia, where its brands include market leader Baltika, rose to 38.4 percent from 38.3 percent in the previous quarter.

First-quarter operating profit before one-off items was 661 billion crowns, exceeding analysts’ average forecast for 626 billion. Sales rose 3 percent, also above forecasts. .

Its shares rose 0.9 percent to 552.50 crowns a share at 1043 GMT, in line with the Copenhagen benchmark index, having risen as much as 5.5 percent at the market open. (Editing by David Cowell and Louise Heavens)

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