Yahoo Finance Carlsberg warns of 'challenging' 2023 as brewer plans price hikes to offset costs
By Scott Kanowsky
Investing.com -- Carlsberg A/S B (CSE:CARLb) has said that it intends to raise prices this year in response to higher input costs, but warned that the move may impact sales in some of its key markets.
The Danish brewer flagged that it faces a "challenging year" following a surge in the cost of commodities and energy in 2022. The company said it plans to offset these expenses in part through bumping up prices and reining in expenses.
"While beer historically has been a resilient consumer category, the higher prices in combination with generally high inflation may have a negative impact on beer consumption in some of our markets, particularly in Europe," Carlsberg said.
It added that it remains "uncertain" how the ongoing war in Ukraine and China's reopening from strict COVID-19 rules will impact demand.
As a result, it set a broad guidance range for the year-on-year change in annual organic operating profit of between -5% to 5%. It also expects to book a negative currency effect of around DKK -550 million ($1 = DKK 6.95).
In the 2022 financial year, Carlsberg fell to a net loss of DKK 1.06B, down from a profit of DKK 6.85B in 2021. However, the result was better than analysts' expectations for a loss of DKK 1.14B.
A recovery in trading conditions in western Europe and strong performance in Asia, particularly in the first half, partly offset the surge in costs, Carlsberg said.
In a note to clients, analysts at RBC said the results looked "okay," but called the outlook for 2023 disappointing.
Shares in Carlsberg slipped in early European trading on Tuesday.
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