E-Malt.com News article: 2604

Denamrk: Carlsberg A/S announced on May 6 Q1 Financial Statement of the Carlsberg Group as at 31 March 2004. Profits earned in the first quarter of the year have little impact on the full-year profit because of the seasonal nature of the brewing industry. Net revenue rose by 3% compared to Q1 2003 when calculated in local currencies. However, due to the strengthened Danish currency, net revenue calculated in DKK was 1% down on last year, totalling DKK 6,765m. Operating profit (EBITA) totalled DKK 154m against DKK 18m in Q1 2003. Carlsberg A/S' share of profit totalled a minus DKK 96m compared to a minus DKK 126m in Q1 2003. Adjusted for the effect of amortisation and write-down of goodwill, etc., profit totalled a plus DKK 26m, which is an improvement of DKK 96m compared to Q1 2003. Expectations to Carlsberg A/S’ share of profit for 2004 (before goodwill, etc.) are revised upwards from DKK 1.3-1.4bn to DKK 1.4-1.5bn (DKK 1,179m in 2003).

When calculating its share of profit, Carlsberg A/S has included Orkla's minority share until the completion of the transaction (in effect for the months of January and February), which in total affects the minority interests positively and hence Carlsberg A/S' share of profit with a plus DKK 93m. As of 1 March, the net profit of the brewery-related activities will be included 100% in Carlsberg A/S' income statement.

Holsten Brauerei is not included in the income statement of Q1, however the last three quarters will be included in the 2004 results. In Q1, Holsten Brauerei's beer sales were up 10.8% on last year. In the balance sheet as at 31 March 2004, the acquisition has been entered under investments. Holsten Brauerei's balance sheet will be consolidated in the Group balance sheet as from Q2.

Carlsberg A/S has carried out a rights issue offering circular which closed on 20 April 2004. The issue was fully subscribed. A total of 15,215,680 new B shares offered at a nominal value of DKK 20 were subscribed to at a price of DKK 225 per share adding a net revenue of approx. DKK 3.3bn to the company.

The Q1 beer sales of the Carlsberg Group were 16.8m hl (+4%) calculated in accordance with industry standards (100% of the volume for subsidiaries, proportionally consolidated and associated companies as well as licence production). A calculation of volume based on subsidiaries and licence production with the addition of ownership shares in proportionally consolidated and associated companies shows a volume of 11.3m hl (+8%). This calculation method has been applied in the regional segments below. The Carlsberg brand showed 7% progress.

Net revenue showed a marginal decline from DKK 6,855m to DKK 6,765m (-1%). However, if measured in local currencies, net revenue rose slightly by 3% due to the continued sales growth in BBH. Operating profit totalled DKK 154m against DKK 18m last year despite adverse exchange rate developments (a minus DKK 36m). Special items totalled a minus DKK 114m and mainly stem from costs related to the restructuring of sale and logistics activities in Denmark. Financials, net amounted to a minus DKK 96m, which is a significant improvement compared to last year due to favourable exchange rate developments etc. on the loan portfolio (a plus DKK 110m compared to last year).

Profit before amortisation and write-down of goodwill, etc. was DKK 1m against a minus DKK 112m last year. The favourable development in operating profit as well as the reduction of net borrowing costs were to a certain extent offset by the restructuring costs under special items.

Carlsberg A/S’ share of profit totalled a minus DKK 96m against a minus DKK 126m in the same period last year. When corrected for the effect of amortisation and write-down of goodwill, etc., the share of profit amounted to a plus DKK 26m which should be compared to a minus DKK 70m last year. The total balance sum amounted to approx. DKK 61bn reflecting the effect on the balance of Carlsberg A/S' acquisition of the 40% shareholding in Carlsberg Breweries as well as of the Holsten shareholding. The figure does not include internal debts in Holsten as the acquisition has been made up as an investment. As a result of this and as expected, net interest-bearing debt increased to approx. DKK 29bn. The free cash-flow of the Carlsberg Group showed a seasonal negative DKK 1.0bn
exclusive of the Holsten acquisition.

Profits earned in the first quarter of the year have little impact on the full-year profit because of the seasonal nature of the brewing industry. Due to the operational and financial gearing of the Carlsberg Group, the seasonal fluctuations in the Group's profit have increased during the past years.

The Q1 results of the brewery-related activities were in line with the company's expectations and somewhat up on last year both as regards operating profit and net profit. The brewery- related activities account for a total of DKK 120m of operating profit (EBITA), and hence reveal a rise of DKK 115m despite an adverse exchange rate effect of DKK 36m.


07 May, 2004