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Last Updated: Tuesday, 21 February 2006, 10:30 GMT
Russian revenues boost Carlsberg
Carlsberg beer
Carlsberg has seen tough sales in its traditional market
Brewer Carlsberg has seen its annual profits rise 8%, driven by strong growth at its Russian and Eastern European units.

The Danish firm made a net profit of 1.4bn kroner ($224m; 128m) in 2005, up from 1.3bn kroner in 2004.

Annual sales rose to 38bn kroner from 36bn kroner the previous year.

Carlsberg also unveiled plans to shut its inefficient Valby brewery in Copenhagen and switch production to its Fredericia plant in western Denmark.

Efficiency boost

The firm said the move, which will be backed by 800m kroner in investment, will be completed by the end of 2008.

It said the transfer of production was expected to bring annual efficiency gains of 130m kroner, and would affect 240 jobs in the Danish capital.

"The results are in line with our expectations, but the most important thing is the closing of the Valby [Copenhagen] plant," said BNP Paribas analyst Nikolaas Faes.

"Because Carlsberg is the most inefficient brewery in Western Europe, the closing indicates that the company really is starting to focus on this problem."

Tough markets

Carlsberg admitted that it was now relying on its newer markets for sales and profits growth.

"Carlsberg's traditional markets in Western Europe saw stagnation or decline and continued price pressure, while its growth markets in Eastern Europe and Asia continued to grow well," it said.

The company added that sales and profits would continue to grow in 2006 in line with current expectations.

UK brewer Scottish & Newcastle also reported its 2005 annual results on Tuesday, posting a 10% rise in profits.

The firm, which produces Kronenbourg, Fosters and Sagres beers, said its 2005 pre-tax profit came in at 392m, up from 358m a year earlier, despite tough trading in France.

It added that it hoped this summer's 2006 World Cup would boost beer consumption.

Scottish & Newcastle's annual group revenues were up 4.1% to 3.9bn.

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