Carlsberg Shares Tumble After Cuts 2011 Outlook
Shares in brewer Carlsberg plunged by 13.5 percent in early trade Wednesday after it warned that profits for 2011 would be lower than expected after beer sales fell in Russia.
The Danish company said full-year 2011 operating profit before special items is now expected to be around 10 billion Danish kroner ($1.9 billion) compared to 10.25 billion Danish kroner in 2010.
Adjusted net profit growth for 2011 is now expected to be 5-10 percent, down from the previous expectation of more than 20 percent.
The company blamed unprecedented consumer price increases, after rising input costs, and poor weather in Russia, for the decline.
Jørgen Buhl Rasmussen, chief executive of the drinks company, said in a statement: "The recovery in the beer category is taking longer than we anticipated as the Russian consumer adapts to the exceptional price increases of around 30 percent undertaken during the last 18 months.
"This impacts negatively our Russian 2011 profits and is the driver behind our revised 2011 outlook. However, with the adjustments we're making to our local portfolio, channel approach and forward pricing strategy, I'm confident that our Russian business will return to growth."
He added that he was "pleased with the performance of the rest of the group."