Eastern European sales lift Carlsberg

Carlsberg steals a lead on small, local breweries

A growing taste for Carlsberg beers among Eastern European drinkers sent the Danish brewer's profits foaming this winter, Carlsberg said.

Carlsberg's marketing has brought in rising sales

"The results are the most solid for 18 months," said Merrill Lynch analysts.

Carlsberg's beer sales rose 21% to 7.5bn Danish kroner (£628.6m; $920.5m) during the three months to March.

The profits were also fuelled by the restructuring of Carlsberg's businesses in Western Europe, including the integration of its Swedish and Polish operations.

In addition, acquisitions of brewers in Turkey and Poland helped hoist profits higher.

Operating profits over the same period trebled to 439m kroner, up from 144m kroner a year earlier.

Carlsberg shares gained 10% in early trading, boosted by the strong performance so far this year and by the company's prediction that its operating profits should rise 15% this year.

Share buy-back

Recent strong sales and profits have enabled Carlsberg to build up notable cash reserves.

Carlsberg said it would spend about 1bn kroner of these reserves to buy back its own shares.

The company also said it is going ahead with its Eastern European expansion push.

This would involve a $50m (£34.14m) investment in a new brewery in Kiev, Ukraine, through its 50% owned Baltic Beverages Holding subsidiary.

The brewery should be up and running by 2004.

Who owns what?

The remaining 50% stake in Baltic Beverages is owned by Finland's Hartwall which is due to be taken over by the UK brewer Scottish & Newcastle.

Baltic Beverages owns about a dozen breweries in the former Soviet Union.

Carlsberg owns 60% of Carlsberg Breweries while the Norwegian industrial holding company Orkla owns the remaining 40%.