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. Last Updated: 07/27/2016

Baltic Beverages Profit Climbs 26%

Baltic Beverages Holding, the Russian brewer owned by Carlsberg and Scottish & Newcastle, said second-quarter profit gained 26 percent as rising wages spurred purchases of beer, Scottish & Newcastle said Wednesday in a statement.

Earnings before interest, taxes, depreciation and amortization climbed to 248 million euros ($339 million), Scottish & Newcastle said. Sales gained 33 percent to 825 million euros.

Sales are rising at Baltic, whose main asset is Baltika Breweries, as higher incomes enable more drinkers to switch away from vodka and buy premium brews. The country's beer market may expand by 5 percent this year, according to UBS.

The EBITDA margin, or earnings as a percentage of sales, narrowed by 1.7 percentage points to 30 percent in the quarter because of higher costs, Baltic said in the statement. Expenses will remain "challenging going forward," it said.