Carlsberg cuts profit forecast, to revise strategy
The world's fourth-largest brewer Carlsberg reported second-quarter operating profit below expectations, hit by cold weather in Northern Europe and market decline in Eastern Europe.
Operating profit before special items fell 18.9 percent to 2.92 billion Danish crowns ($432 million) in April to June, below a forecast of 3.24 billion crowns in a Reuters poll.
The company did not achieve the full range of anticipated savings, and a process of revising its strategy to re-establish and further strengthen financial stability has been initiated, said Cees 't Hart, who took over as chief executive on June 15.
"For the full year, we therefore do not expect that the strong Asian performance will be enough to offset the weaker-than-expected results in Western Europe and the challenging market conditions in Eastern Europe," Hart said in a statement on Wednesday.
Carlsberg lowered its full-year financial guidance and now expects organic operating profit to decline slightly. Earlier it expected mid- to high-single digit organic growth percentages.
The results of revising strategy will be announced in the first half of 2016.
Brokerage firm Alm. Brand Markets expects the share price to drop 5 to 10 percent when stock market opens in Copenhagen at 0700 GMT.
"We don't expect the cost-cutting program being able to compensate for very uncertain market conditions," analyst Michael Friis Jorgensen from Alm. Brand Markets wrote in a note to clients.
Carlsberg, under pressure from poor performance in its key market Russia, cut jobs at its headquarters and regional offices by 20 percent from around 900 employees in May.