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July 3, 2018 11:00 am | FILED UNDER: business

Budvar Profits Down 7% In 2017

By ČTK Budvar Brewery

Ceske Budejovice, South Bohemia, July 3 (CTK) – Sales of Budejovicky Budvar brewery fell by less than 3 percent to Kc2.47bn last year and pre-tax profit dropped by almost 7 percent to Kc314.7m, according to the brewery’s annual report, Budvar’s spokesman Petr Samec told CTK today.

 

In 2016, Budvar’s sales reached a record Kc2.54bn and pre-tax profit was worth Kc337.3m.

 

Last year’s sales were affected by firming of the Czech crown after the end of the Czech National Bank’s (CNB) forex interventions, said Budvar CEO Petr Dvorak.

 

After-tax profit decreased by 3.6 percent to Kc255m. Operating profit, which went down by 7 percent to Kc321m last year, was affected by a 7.3 percent growth in personnel costs, the annual report says.

 

Price of Zatec hops rose significantly and transport was more expensive as well. The company also grappled with lack of employees and had to cope with the increase of minimum wage by Kc1,100 to Kc11,000 a month, Dvorak remarked.

 

In a situation when the brewery is unable to satisfy all orders due to limited production capacity and lack of employees, investment strategy is a priority, he added. Budvar invested Kc735m last year.

 

Budvar was thus unable to repeat the record output from 2016 when it produced 1.61 million hectolitres of beer.

 

Budvar sold 1.547 million hectolitres of beer last year, down 4 percent from 2016, despite higher exports. The brewery exported a record amount of over 990,000 hectolitres of beer last year, 1.5 percent more than in 2016, and the exports targetted 76 countries.

 

This year in March, Budvar launched a modernised beer canning line for Kc40m. A new logistic centre for Kc750m started trial operation in April and construction of a new cellar for lager for Kc250m in May. The beer ripening capacity will increase by 20 percent.

 

Construction of a new bottling line will begin this year and a new brewing house will be the last extension. It is a part of a development plan launched in 2016. By 2020, Budvar will have invested Kc2bn. Its annual output will then increase by a quarter to 2 million hectolitres of beer.

 

Budvar has 670 employees.

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