Mixed messages from the brewers
The brewing industry received a double dose of mixed news this week after both Molson Coors and Carlsberg reported healthy second quarter profits but saw a further decline in global volumes.
Carlsberg, the Danish producer of Tuborg and Baltika alongside its own eponymous brand, said second quarter profits rose 37% due to price increases and savings incurred from last year’s takeover of Scottish & Newcastle Plc outweighing weakening trade in Russia.
Net income at Carlsberg rose to £222m from £162m, beating many analysts’ predictions.
The company was forced to cut its 2009 revenue forecast after sales remained relatively flat at £697m.
In May, Carlsberg chief executive officer Jorgen Rasmussen said savings from the Scottish & Newcastle acquisition are set to surpass the company’s three-year target of £148m. The deal gave Carlsberg full control over Baltika, the biggest beer producer in Russia, where the brewer’s volumes fell 9% in the second quarter.
Meanwhile Molson Coors said its second-quarter profits doubled thanks to price rises and cost cutting, despite reporting a drop in sales as consumers tighten their purse strings.
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The Denver-based brewer said global beer sales in the three-month period ending in June dropped 3.2%, with volumes in Britain crashing by 12.4%, outpacing the total UK beer industry decline of 5%. The brewer said, however, that its UK strategy continues to be one of emphasising revenue growth over short-term volume growth.
Molson Coors earned £110.7 million in the three months until June, compared to earnings of £54.3 million or 49 cents a share, in the same period last year, before Molson Coors and SABMiller PLC formed their joint venture MillerCoors.
Profits at MillerCoors, incidentally, rose 75% to £180.2m, with sales rising 1% to £1.5bn in the quarter.
Alan Lodge, 05.08.2009
