Sales at Carlsberg have soared past pre-pandemic levels as warm summer weather and the resurgent on-trade boosted performance. However, shares remain down for the year due to concerns over its second half outlook and instability in eastern Europe.

Having upgraded its full-year earnings expectations last week, Carlsberg beat market forecasts for its first-half performance, surging by 20.7% in the half and by 18.7% in the second quarter. That took overall revenue growth for the first six months of 2021 to 23.6% at DKK35.5bn (£4bn), as the brewer benefited from positive currency translation on top of strong organic growth.

Volumes jumped 8.9% in the half driven by a strong performance in western Europe and Asia, offsetting the impact of the conflict in Ukraine. Pricing was up 11% as it pushed through inflationary price increases as well as benefiting from channel and country mix.

Strong organic operating profit growth of 31.8% reflected the on-trade recovery and the performance in Asia – albeit partly offset by higher commodity prices and energy costs.

Reported operating profits increased 35.9% to DKK6.4bn (£723m). However, the impact of DKK10.4bn of writedowns in Russia, Ukraine and Central and Eastern Europe pushed the group to a loss of DKK5.3bn (£600m).

CEO Cees ’t Hart hailed the “strong” results, but warned surging inflation would continue to be a challenge for the rest of the year.

“Global uncertainty remains high, with the increasing input cost pressure a particular challenge for us in the coming quarters,” he said. “In this environment, we’ll continue to seek the right balance between mitigating the short-term challenges and investing in the long-term opportunities.”

 Despite these threats, last week the group increased its full year expectations for organic operating profit growth from a range of –5% to +2% to a “high single-digit percentage”, due to stronger than expected first-half results.

Carlsberg shares were up 3.9% on Wednesday to DKK996.8, though remain 14% down so far in 2022 after Russia’s invasion of Ukraine impacted the stock.

CMC markets commented: “If Carlsberg did summers, then they would be very hot summers, and that has probably helped drive sales higher thus helping offset higher costs. The key test will come when the weather cools down.”

Carlsberg intends to step up marketing spend, but guided to a weaker second half due to rising commodity prices and energy costs and last year’s hedging rolling off. It warned there would be a timing difference between increases in cost of sales and price increases, and it also faces tougher comparables as the impact of Covid wears off.

Broker Bernstein welcomed the pledge to step up brand investment, commenting: “Carlsberg continued the trend of very strong post-COVID rebounds for the European brewers… . The cost control at Carlsberg has been incredibly impressive; it’s now time to ramp up the sales & marketing.”