By Stine Jacobsen
COPENHAGEN (Reuters) - Carlsberg's (CO:CARLb) first-half profit beat forecast despite declining beer volumes as drinkers opted for pricier beers, while cost cuts enabled the brewer to further invest in a strategy to sell more expensive beer.
Denmark's Carlsberg (CO:CARLa) launched its seven-year SAIL'22 plan in 2015 to deliver organic sales growth and margin improvements by striking a balance between volume growth and more profitable products.
"Our strong financial results enable us to accelerate our investments in the SAIL’22 priorities to drive sustainable long-term growth of the Carlsberg Group," said Chief Executive Cees’t Hart in a statement.
The group's price mix improved by 4 percent, driven by Asia and Eastern Europe in the first six months, helping its profit margins improve by 2 percentage-points to 13 percent. A higher price mix indicates the company sold more of more expensive beers.
The firm's headache, the Russian beer market, declined by 5 percent in the first six months hit by the sales ban of beer in so-called PET bottles, popular plastic bottles larger than 1.5 liters, as well as a challenging consumer environment and cold weather, Carlsberg said.
Half-year operating profit before special items rose almost 20 percent on the year to 4.13 billion Danish crowns ($652 million), above a forecast of a 3.92 billion crowns seen in a Reuters poll.
The company maintained its 2017 outlook of mid-single-digit organic growth in operating profit, and said it now expects a positive impact from currency exchange of 50 million crowns versus a previous guidance for 300 million.
($1 = 6.3328 Danish crowns)