Danish brewer Carlsberg posted half-year results slightly below expectations, but said it would maintain its 2016 outlook as its cost-cutting strategy shows progress.
The company reported a six-month operating profit before special items at 3.45 billion Danish crowns ($522.12 million), down 4 percent from same period last year, with the beer producer undergoing heavy restructuring to stoke growth.
However, Cees 't Hart, chief executive and president of the Carlsberg Group, told CNBC Wednesday that the company's cash flow, operating profit and net revenue growth were all good. However, he warned of challenges ahead.
"We see some cost increases in Russia ...We feel that the second half of the year might not be a strong as the first half-year, compared to last year," he said.
He added that volumes in China were changing "a lot" due to lower growth in the country and said that "cheap dining" in the country was more or less disappearing.
"You see shifts in the economy there, and the social demographic build-up." He said that volumes might be under pressure in China but added that the "value" was growing with Carlsberg having a fast-growing international portfolio of products.
Meanwhile, the company's total sales volumes fell 1 percent due to lower volumes in Britain, Poland and Eastern Europe, but organic revenue grew by 4 percent.
"The new strategy of finding a balance between volume growth and value creation is already showing its effects," said Sydbank analyst Morten Imsgard.
Group revenue for the half-year amounted to 31.2 billion crowns, just below analyst estimates of 31.8 billion in a Reuters poll.
The company maintained its full-year 2016 outlook of low-single-digit percentages organic operating profit growth, but the impact on operating profit from foreign exchange was raised to -600 million crowns from -550 million.
Shares in Carlsberg fell 4 percent in morning trade on Wednesday, but Javier Gonzalez Lastra, senior beverages analyst at Berenberg, gave credit to the new management team who, he said, had increased the company's focus on getting a better balance in terms of market share and profitability.
"I think what the market was a little bit disappointed (about) was despite that strength in the organic number in operating profit the guidance was not increased, there's actually a little bit of a downgrade in FX (foreign exchange) guidance for the full year," he told CNBC Wednesday.