The Russia-Ukraine conflict is showing up in the financial reports of more European companies.
Danish beer maker Carlsberg said on Wednesday that revenue in its Eastern Europe operating segment fell 20% in the second quarter as total volumes decreased 12%.
Shares of Carlsberg listed in New York were down more than 3% on Wednesday following the news.
In a release, Carlsberg said: “The value of the Russian beer market grew in the first six months while market volumes declined by an estimated 6-7% due to the uncertain macroenvironment, weak economic development and bad weather, particularly in June.”
The company added that Ukrainian beer market declined by 10% due to what it called a, “very challenging and uncertain macroeconomic climate coupled with a 43% beer tax increase in May.”
Carlsberg also said that distribution to some cities in eastern Ukraine has been “challenging.”
Carlsberg’s operating margin in Eastern Europe, however, increased during the quarter, as Carlsberg decreased its package size to minimize price increases.
This commentary from Carlsberg follows an announcement on July 31 from German athletic apparel maker Adidas, which said that the situation in Russia put its short-term profitability contributions from the region in doubt.
And amid the instability in Russia and Ukraine, many have noted that taken as a per cent of the world’s GDP, Russia is a small player. But this doesn’t exempt companies highly exposed to the Russian economy from feeling the impacts of sanctions and continued instability.
In July, we highlighted this chart from Citi, which showed that among foreign companies, Carlsberg had the second-highest exposure to Russia and Ukraine.