Carlsberg Suspends Guidance, Warns of Impairments Due to Ukraine Crisis

By Dominic Chopping

Carlsberg AS has suspended its 2022 earnings guidance and warned of possible impairments and writedowns amid the uncertain business impact of Russia's war with Ukraine and the possible indirect impact on the rest of the group, it said late Wednesday.

Russia and Ukraine accounted for around 13% of Carlsberg group revenue and 9% of operating profit in 2021, and while other markets are currently seeing only a limited business impact, rising commodity and energy prices will weigh, it said.

"We do not consider it prudent to provide guidance for 2022 and are therefore suspending our earnings guidance for the year," Carlsberg Chief Executive Cees 't Hart said.

"The group's assets in both markets may also be subject to non-cash impairment and writedown," he said.

Carlsberg had guided for FY 2022 organic earnings before interest and tax growth of 0%-7% and a positive currency affect of 250 million Danish kroner ($36.9 million).

Baltika Breweries, part of the Carlsberg group, owns eight breweries in Russia and has around 8,400 employees there, representing more than one in every five of its total global workforce.

Carlsberg said last week it would make no new investments in Russia and halt exports to the country. It has since stopped all advertising by both the Carlsberg group and Baltika Breweries in Russia, and it will stop producing and selling its Carlsberg beers in the Russian market.

"We feel a moral obligation to our Russian colleagues who are an integral part of Carlsberg, and who are not responsible for the actions of the government," Mr. 't Hart said.

"Baltika Breweries will be run as a separate business, with the purpose of sustaining our employees and their families," he said.

Carlsberg said it is reviewing a full range of strategic options for its Russian business and in the meantime will donate any profits generated by the Russia business to relief organizations, in addition to its previously announced 10 million-euro ($11 million) donation to support humanitarian efforts in Ukraine.

Carlsberg owns three breweries in Ukraine and has more than 1,300 employees there.

Write to Dominic Chopping at [e-mail]

(END) Dow Jones Newswires

March 10, 2022 03:00 ET (08:00 GMT)

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