Baltika Profits Soar on Pricier Brands

Carlsberg's Baltika Breweries, Russia's largest beer company, said nine-month profit rose 7.7 percent as consumers bought pricier brands.

Net income climbed to 360.7 million euros ($460.1 million) from 334.8 million euros a year earlier, the brewer said Friday. Revenue increased 13 percent to 1.99 billion euros.

Profitability increased in the second and third quarters under a strategy to raise sales of more expensive brands such as Carlsberg's Tuborg and Asahi Breweries' Asahi Super Dry, as well as projects to improve distribution and marketing, Baltika said. Sales of Tuborg, the best-selling licensed brand, gained 24 percent, while sales of its own brand rose 17 percent.

"A higher share of premium brands in total sales helped to offset rising costs of production," said Sabina Muhamedzhanova, an analyst at Bank of Moscow, who has a "buy" recommendation on the stock.

Sales growth in the nine months was helped by an increase in excise tax and the ruble's 5 percent depreciation against the euro, according to Elena Mills and Vitaly Kupeyev, analysts at Alfa Bank in Moscow who do not have recommendation on the stock.

Russia's beer consumption is "getting close to western European standards," Carlsberg CEO Joergen Buhl Rasmussen said last week.