Carlsberg will spend on restructuring the Russian business of $720 million

Carlsberg will spend on restructuring the Russian business of $720 million

The company estimates, in the third quarter of the beer market in Russia fell by 10-11%, while shipments fell by 18%. The company predicts further market declines.

MOSCOW, 11 Nov. Danish company Carlsberg, one of the world’s leading producers of beer (includes JSC “brewing company “Baltika”), expects to spend on restructuring the Russian business 5 billion Danish kroner (720,78 million dollars), said in a statement.

Business restructuring will be carried out in connection with the falling demand for beer in the Russian Federation and the depreciation of assets, said in a statement. The beer market in Russia in the third quarter fell, the company estimates, at 10-11%. Shipments fell by 18%. The share of the total market volume of the company amounted to 35.1 per cent.

“We came to the conclusion that the difficult conditions of the Russian market will continue over the next few years, and, consequently, reduce the demand for the beer category will continue. This would adversely affect the profits of our Russian business. This will require additional restructuring of our manufacturing network”, — the message says.

In the first nine months Carlsberg consolidated loss amounted to 2,665 billion kroons (384,177 million dollars) against a profit of 4.66 billion kronor (671,76 million) a year earlier. Loss per share amounted to 19.7 crowns ($2.83) against a profit of 27.8 crowns in January-September 2014. Revenue increased by 1.03% to 50,698 billion kroons (7,308 billion).

In the third quarter, the company incurred a loss of CZK 4,481 billion (645,96 million dollars) against a profit of 2,248 billion kroons during the three reporting months of last year. Loss per share was 29.5 crown (4.25 USD) against a profit of 13,8 crown in the third quarter of 2014. Revenue grew by 0.97% to 18,296 billion kroons (2,637 billion).

Carlsberg A/S, founded in 1947 in the Danish brewing company, has a leading position in the global beer market. In the portfolio of its brands to over 500 brands including Carlsberg, Tuborg, Kronenburg, “Baltika” and others. The company’s products are sold in more than 150 countries. The Carlsberg group owns 89,01% of the share capital of JSC “brewing company Baltika, the largest beer producer in Russia.