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Carlsberg posts $5.9b loss after losing Russian unit

AFP . Copenhagen
07 Feb 2024 16:48:46 | Update: 07 Feb 2024 16:48:46
Carlsberg posts $5.9b loss after losing Russian unit
— AFP Photo

Danish brewer Carlsberg posted Wednesday a loss of 40.8 billion kroner ($5.9 billion) for 2023 after Moscow took control of its Russian unit following the company's decision to sell the business and exit the country.

Carlsberg had announced in June that a buyer had been found for Baltika Breweries, which it has owned since 2000, but President Vladimir Putin later signed a decree saying the state was taking over the business.

Carlsberg CEO Jacob Aarup-Andersen later said Russia had "stolen our business". Moscow countered that the seizure was legal.

A slew of Western companies have withdrawn their businesses from Russia in the wake of Moscow's invasion of Ukraine. The United States and European Union have imposed sweeping sanctions on Russia.

Russia had been one of Carlsberg's biggest markets, accounting for 9 per cent of profits in 2021. The decision to exit the country had already pushed the company into a net loss of 1.06 billion kroner in 2022.

In October, Carlsberg announced it had cut licensing agreements with Baltika Breweries which allowed the local business to produce, market and sell Carlsberg products.

The Danish company said Wednesday that Baltika will be able to use up existing stock and materials until April this year.

"We continue to take all possible actions, including legal, to protect assets and operations," Carlsberg said.

While the loss of Baltika pushed Carlsberg into a loss, the Danish group reported a 4.7 per cent increase in sales to 73.6 billion kroner, driven by price increases to offset higher costs due to soaring inflation.