Carlsberg brewer swings to loss on costs of acquisition
COPENHAGEN, Denmark—Carlsberg A/S said Wednesday it swung to a loss in the first quarter mainly due to costs related to its acquisition of a stake in the brewer Scottish & Newcastle, which it bought together with Dutch rival Heineken NV.
Copenhagen-based Carlsberg also said Wednesday it has agreed to sell its mineral water trademarks in Denmark and some nonalcoholic beverage brands in Finland to The Coca-Cola Co., the Atlanta-based soft drink company.
No terms were disclosed.
The brewer of Carlsberg and Tuborg beer reported a net loss of 129 million kroner ($27 million) in the first three months of the year, compared with a profit of 45 million kroner in the same quarter last year.
Carlsberg blamed the loss on the financing costs of its recently purchased stake in S&N, which it acquired in a move to gain full control of Baltic Beverages Holding, or BBH -- Russia's biggest beer producer by revenue and volume.
BBH operates 19 breweries, holding the top position in Russian, Baltic and Kazakh beer markets, and ranks third in Ukraine. Its brands include Baltika, Arsenalnoe, Slavutich and Alma-Ata.
BBH continued to gain share in its main markets in the quarter, Carlsberg said.
Costs for sales and distribution also weighed on the results, increasing to 3.3 billion kroner ($687 million) in the quarter from 3.2 billion kroner in the same period in 2007.
Sales in the period ended March 31 rose to 9.4 billion kroner ($2 billion), up sharply from 8.9 billion kroner for the same quarter the previous year.
Carlsberg said the rise was in part due to the higher average selling price of beer.
Carlsberg shares fell 2.9 percent to close at 637 kroner ($132.09) in Copenhagen.
In a statement, Chief Executive Joergen Buhl Rasmussen noted that the company's first-quarter profits "make only a modest contribution" to Carlsberg's full-year earnings. Warm weather in the second and third quarter usually encourages more beer drinking and boost the profits.
Buhl Rasmussen also said that, thanks to its recent acquisitions, his company is a "strong business, equipped in every way for the challenges and opportunities which lie ahead."
On the beverage deal, Coca-Cola said the companies had signed a letter of intent regarding the trademark and brand-owner rights for Scandinavian water brands Kildevaeld, Kurvand and Ramlosa and the soft drink Hyvaa Paivaa and energy drink Battery in Finland.
Carlsberg said the deal was expected to be completed in the second quarter.
Carlsberg also said it had bought a 16 percent stake in Vietnamese brewer Habeco for 545 million kroner ($114 million) at the end of the first quarter.
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