Carlsberg (CARLb.CO) reported a 6.5% rise in half-year sales on Thursday, as the Danish brewer sold more expensive beer and its operating margins improved despite continued challenges in Russia.
The brewer posted improved earnings but saw declining sales in Russia, its key market, due to tough competition and price hikes at the beginning of the year leading to a loss of market share.
Total volume in Russia declined by 3%, the company said.
Asia, the brewer’s fastest-growing market, delivered organic net revenue growth of 15%, lifted by 8.5% volume growth and increased sales of premium brands, even though the Chinese market declined slightly, the company said.
“Asia continues strongly as expected. It looks good over there both on volume and price mix and their craft and specialty beer”, Jyske Markets analyst Henrik Hallengreen Laustsen told Reuters.
Carlsberg has shifted its focus from cost-cutting to revenue growth, especially by selling more of its pricier brands.
The brewer reported a 3% increase in price/mix, which indicates whether the company sold more of its expensive brews.
Sales in the first six months of the year came in at 32.99 billion Danish crowns ($4.9 billion), the company said.
“We delivered a strong set of results for the first six months of 2019, with healthy top-line development, strong margin improvement and continued solid cash flow” Chief Executive Officer Cees ‘t Hart said.
Operating margins came in at 16%, an improvement of 160 basis points, the company said.
Last week, Carlsberg raised its expectations for organic operating profit to “high-single-digit” from “mid-single-digit” percentage growth and said it had achieved a strong operating margin improvement.