Olvi Plc (HEL: OLVAS) said it had a good year in 2011 but fourth quarter issues will cause it to slightly miss guidance. This is because of the hyperinflationary conditions in Belarus and subsequent currency losses on Belarusian ruble (BYR). Olvi now guides for operating profit of approximately 26,5 million Euros in 2011, which is 4 million below 2010 numbers. This means that Q4 2011 should print an operating profit number slightly above zero. Previous guidance was for a slightly lower profit than in 2010. The company said it sold 472 million litres of beverages in 2010 to reach sales of 267,5 million Euros.
The Finnish brewery and soft drinks maker owns over 90% majority in Lidskoe Pivo brewery, which is the fourth largest of its kind in Belarus. Its brands include Lidskoe and Tema. Olvi has been calculating that the trend from vodka to beer which has been observed in Russia will also be seen in Belarus. Lidskoe Pivo is a traditional company which has normally been making a healthy profit. It also exports to nearby countries.
In addition to State run beer companies that still command a large portion of the market, global giants Carlsberg A/S (OMX: CARL A, OMX: CARL B) and Heineken also compete with Olvi in Belarus. Olvi’s stock responded to the news with a 0.8% decline in Monday trading. Its Q4 financial statements bulletin is due on the 23th of February.
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