Olvi Group posts mixed results

  • 2003-11-13
  • Baltic Business News
RIGA - The Olvi Group, one of the Baltics' largest beverage producers, posted mixed results for the first three quarters of the year, though its position on the Latvian beer market improved significantly.

The group - which consists of parent company Olvi Plc and subsidiary breweries AS Tartu Olletehas, Cesu Alus and Ragitis - posted sales of 86 million euros from January to September, down 1.3 percent from the same period last year.
The group's operating profit for the nine-month period amounted to 7.6 million euros, while net profit was 4.63 million euros.
Cesu Alus, the group's Latvian subsidiary, strengthened its market share to 11.6 percent to become the country's second most popular beer. Turnover increased a staggering 60.2 percent to reach 4.6 million lats (7 million euros).
In total, Cesu sold 14.2 million liters of beverages in the nine months of 2003.
Still, despite the gains, Cesu continued to operate in the red, Olvi reported in its statement, chiefly due to depreciation of fixed assets.
The group's Lithuanian brewery, Ragutis, also reported a loss for the nine months, as the country's fourth largest brewery suffered from declining beer prices and shrinking sales. For instance, this year Ragutis did not export to Cesu Alus, though in 2002 it had delivered 1.7 million liters of brew to its cousin company in Latvia.
2004 promises to be a major turning point for the Olvi Group. In September A.Le Coq, Olvi's chief Estonian subsidiary, acquired OU Finelin, which in turn owns 100 percent of the beverage producer AS Osel Foods.
The acquisition price was 10.3 million euros, though final approval of the sale from Estonia's competition authority has yet to be received. Olvi's competitors, particularly Saku Brewery, have claimed that the merger might violate competition rules and have asked for an additional review.
Osel Foods manufactures juices and mineral waters, as well as soft drinks with added vitamins. Its sales in 2002 amounted to 10.4 million euros, while sales for the first six months of this year stood at 7.0 million euros.