- Hans Weber
- November 30, 2023
Budějovický Budvar Reports Decline in Profits Amidst Challenging Year
Prague, Czech Republic – Budějovický Budvar, the renowned Czech brewery famous for its Budweiser Budvar beer, has experienced a significant decline in profits over the past year. Pre-tax profits fell by 39.5% to 255.8 million Czech korunas, while revenue from product and service sales decreased by just under 3% to 3.03 billion Czech korunas. The company attributes this decline to various factors, including the repercussions of the war in Ukraine, the suspension of exports to Russia, and the impacts of inflation.
Despite the challenges faced, Budvar has managed to partially offset the loss in revenue. Petr Dvořák, the company’s director, expressed satisfaction with Budvar’s performance in what he described as an “extraordinary” year. He stated, “We have been able to compensate for this decline in volume and revenue to a significant extent.”
Rising energy, fuel, and packaging costs have also impacted Budvar’s profits, with a negative impact of over 250 million Czech korunas on post-tax earnings. Nevertheless, the company has maintained progress in production and sales, with plans to surpass three billion Czech korunas in revenue this year.
The halt in exports to Russia emerged as one of the primary factors contributing to Budvar’s declining profits. The company was compelled to cease exports to Russia, one of its five key export markets, due to the conflict in Ukraine. The remaining export markets include Germany, Poland, Slovakia, and the UK. However, Budvar has partially offset this loss in revenue through the sale of its new non-alcoholic beer, BirGo, produced in collaboration with Mattoni.
Additionally, rising energy and fuel costs, influenced by the situation in Ukraine, have contributed to Budvar’s declining profits. These cost increases have resulted in inflationary pressures, impacting the prices of raw materials and essential production components.
Despite the challenges faced, Budvar remains committed to its production and sales objectives. Export volume decreased by 3.8% to 1.27 million hectoliters last year, with 71.5% of production being exported. However, Budvar aims to export over 1.3 million hectoliters of beer in 2023 and has already sold over 90,000 hectoliters in the UK alone, demonstrating its determination to regain momentum and thrive in a competitive market.
Article by Prague Forum