Carlsberg May Raise Outlook on Russian Recovery, Nomura Says

Carlsberg A/S (CARLB), Russia’s biggest brewer, may raise its profit forecast for the year, according to Nomura analysts, who said an improvement in SABMiller Plc (SAB)’s second-quarter sales in the country indicates a market recovery.

Carlsberg, the maker of Tuborg and Baltika beer, rose in Copenhagen trading after SABMiller said sales growth resumed in Russia during its fiscal second quarter, “aided by exceptionally warm weather in July and August.” The Danish brewer controls 40.1 percent of the Russian beer market.

“With a normalization of both consumer activity and regulatory intervention, we see the Russian beer market as having the largest scope for growing its profit pool in the next five years,” Ian Shackleton, a London-based analyst at Nomura, wrote in a report. “We expect strong third-quarter reporting with a likely increase to full-year guidance,” he said. Carlsberg is due to report third-quarter earnings on Nov. 9.

Russian beer sales slumped after the government tripled taxes on alcohol this year. Carlsberg, which gets about half its operating income from eastern Europe, raised its annual profit forecast in August, saying it expected a high single-digit percentage decline in the Russian market compared with a previous forecast of a “low double-digit percentage.”

Shackleton, who has a “buy” recommendation on Carlsberg and a price target of 750 kroner, estimates that the company will raise its forecast of 2010 operating profit to 10.7 billion kroner ($2 billion) from about 10 billion kroner.

Carlsberg rose 5 kroner to 589 kroner as of the 5 p.m. close of trading in Copenhagen, the steepest gain since Oct. 13.

To contact the reporter on this story: Clementine Fletcher in London cfletcher5@bloomberg.net.

To contact the editor responsible for this story: Celeste Perri at cperri@bloomberg.net.

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