(Press Association) Profits at Carlsberg have plunged more than 70% after a crackdown on alcohol abuse in Russia took the fizz out of beer sales.
The Tuborg and Somersby Cider-maker saw annual net profits sink to 1.3bn Danish krone (£155m) last year, down from 4.5bn krone (£536.1m) as Russian beer volumes dropped 14%.
The Copenhagen-based firm said it was hit by 4.8bn krone (£571.8m) charge linked to its Russian Baltika brand. Russia is a key market for Carlsberg, but a nationwide cap on plastic beer bottles at 1.5 litres has taken its toll on performance.
Annual pre-tax profits also made for bleak reading, dropping 51% to 3.5bn krone (£416.9m) over the period, after it was confronted by a 4% drop in total beer volumes to 112.4 million hectolitres.
Chief executive Cees’t Hart said the group was pencilling in a single-digit rise in operating profit this year and had boosted the 2017 dividend by 60%.
He said: “We delivered a strong set of results for 2017, fuelled by disciplined execution of our efficiency programme – Funding The Journey – which we now believe will deliver around 2.3 billion krone (£274.2m), well above our initial expectations of 1.5bn to 2bn krone (£178.8m to £238.4m).
“During the year, we invested 500m krone (£59.6m) in our strategic growth priorities, which should lead to healthy and sustainable top- and bottom-line growth going forward.”
Carlsberg, which bought London Fields Brewery in July, saw group revenues slip 1% to 61.8bn krone (£7.4bn) in 2017.
Its UK performance also came under pressure last year, dropping 6% as the firm failed to churn out the same sale volumes seen during the Euro 2016 football tournament.