The business in Asia, including in China, was the only major regional unit to deliver operating profit growth in the third quarter but Carlsberg said its breweries in eastern China will be loss-making in the foreseeable future.
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Top among them are increasing organisational efficiency, which allow the brewer whose brands also include Tuborg and Grimbergen “to reduce white-collar headcount by approximately 2,000 employees”, the company said in a statement. The brewer is reviewing its strategy, which it will update in the first quarter of next year.
Launching a savings plan aimed at cutting annual costs by up to $280 million kroner by 2018, CEO Cees’t Hart said Carlsberg acknowledges “that the profit development of recent years has not been satisfactory”.
The group said the new cost-cutting programme contains impairment and restructuring costs during 2015-2017 of 10bn Danish krone (£0.95bn), of which around DKK8.5bn will be charged in 2015.
Adjusted attributable profit, which excluded items, was 2.22 billion kroner, compared to 2.18 billion kroner a year ago.
The group now expects full-year operating profit to decline by a high single-digit percentage.
The brewer’s shares jumped 7.8 percent to 597.5 kroner in a market up 1.2 percent overall.
Carlsberg reported a third-quarter operating profit – before accounting for one-time writeoffs – of 3.47 billion Kroner ($500 million), above a forecast of 3.19 billion Kroner ($460 million) according to a Reuters poll. Organic growth in net revenue was 3 percent.
Total beer sales volumes remained flat at 37.6 million hectoliters. The company said in August that earnings would fall “slightly”, abandoning previous guidance for the year.
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The company plans to restructure operations there after closing two plants in January, cutting production capacity by 15 per cent. Carlsberg also said it’s cutting capacity in the United Kingdom and will reduce costs at its business in China. Carlsberg will, however, continue to pay a dividend of 9 kroner per share despite its poor financial performance.
