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Brewers Had Mixed Results

Major European brewers showed mixed results this week, as capricious weather, smoking bans and one-off charges hit profits but sales in emerging markets boomed.

AP

Carlsberg reported Tuesday it swung to a net profit of 37 million kronor ($7.28 million) in the fourth quarter, compared with a loss of 80 million kroner in the last quarter of 2006.

The Danish company's earnings were boosted by higher sales in their Eastern Europe and Asian markets and said it expected a 10 percent growth in sales in 2008, as well as a 20 percent rise in net profit.

For the full year, its net profit was 2.3 billion kroner, up from 1.88 billion in 2006, according to Associated Press.

Meanwhile, rival and joint-bid partner Heineken said Wednesday its full-year net profit fell 28 percent to 972 million euros ($1.42 billion) from 1.35 billion euros in 2006.

The Amsterdam-based company's profit fell on one-time charges, including a fine of 219 million euros ($321 million) from the European Union for fixing prices on the Dutch market in the 1990s.

Sales missed analysts' expectations with a 6.8 percent increase. The brewer did not specify its growth expectations for 2008 but did express optimism regarding their recent acquisition.

"S&N gives us the opportunity to enlarge our footprint and our size. We have a number of very important new profitables in our home market, Europe. As you know, we are very strong in Europe, we are the market leader," CFO Rene Hooft Graafland told CNBC Europe. The purchase would make Heineken Europe's largest brewer.

The two beer makers announced Friday the effective date of 7.6 billion pounds ($14.9 billion) takeover scheme for Scottish & Newcastle is April 28, after the UK company accepted the raised bid on Tuesday when it reported full-year numbers.

"It clearly will change the profile of Carlsberg," Carlsberg CEO Jorgen Buhl Rasmussen told CNBC Europe about the recently endorsed acquisition.

"And as we said when we got the recommendation from the Scottish & Newcastle board, this will no doubt make Carlsberg the fastest growing beer company in the world. And that's because of a changed profile, more exposure to high growth markets in Eastern Europe, BBH and also Asia."

Carlsberg would gain sole ownership of Baltic Beverages, its Russian joint venture with S&N, and S&N's French, Greek and Chinese operations.

Scottish & Newcastle swung to a $205 million loss for 2007 after turning a profit of $592 million the previous year.

The losses were partly because of 430 million pounds in one-time items, including a 379 million pound loss on the sale of a large stake in its wholly owned French on-trade wholesaling business, the AP said.

It also said sales were affected by poor summer weather in Europe and a new ban on smoking in English pubs.

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