Denmark: Carlsberg estimates a 13% increase in operating profit due to higher sales

Carlsberg AS is expected to report a 2006 operating profit of 3.992 bln dkr, up 13 pct from 2005, according to a poll by RB Borsen, AFX News Limited reported February 15.

Operating profit estimates ranged between 3.905 bln dkr and 4.083 bln dkr.

Sales are expected to increase 7 pct to 40.800 bln dkr with estimates ranging between 40.970 bln dkr and 40.432 bln dkr.

Jyske Bank said Carlsberg's own 2006 operating profit estimate of 3.9 bln dkr looked 'conservative' and forecast the figure to reach 4.096 bln dkr.

The bank said Carlsberg's outlook for 2007, especially for its Western European business, will be in focus when the report is released.

Carlsberg has said it hopes to increase its operating margin in Western Europe to 10-12 pct by 2008, and the group's 2007 outlook will give an indication of how close it is to reaching that goal, Jyske Bank added.

“If Carlsberg's management succeeds in proving to the market that they can reach an operating margin of 12 pct in Western Europe, there is still upside potential in the share,” Jyske Bank said.

The Eastern European brewery Baltic Beverages Holding AB (BBH), of which Carlsberg owns 50 pct, will be Carlsberg's short to mid term growth engine, and signs of slowing growth in the division are considered risk factors, Jyske Bank said.

The bank added that higher margins following rationalizations at BBH and the European units, as well as strategic alliances to increase the group's market share in Italy or England, would boost the share price.

E-malt.com, the global information source for the brewing and malting industry professionals. The bi-weekly E-malt.com Newsletters feature latest industry news, statistics in graphs and tables, world barley and malt prices, and other relevant information. Click here to get full access to E-malt.com. If you are a Castle Malting client, you can get free access to E-malt.com website and publications. Contact us for more information at marketing@castlemalting.com .