HEINEKEN : Expects Weak Demand to Persist As Profits Fall08/21/2013
AMSTERDAM--Dutch brewer Heineken NV (HEIA.AE) said Wednesday that it expects economic uncertainty and weak consumer sentiment to persist in many of its key markets as it reported a 16.6% fall in net profit.
Like its peers, Belgian brewer AB Inbev and U.K.-based SABMiller, Heineken has suffered with bad weather and slack demand in several of its Northern Hemisphere markets.
The company said it expects no material change to underlying trading conditions across the majority of its markets for the remainder of the year, despite benefiting from better weather conditions in July in Western Europe and anticipated volume improvements in some developing markets.
It previously said it expected volume and revenue growth for the full year, with higher growth regions offsetting lower sales in Europe.
"Although the volume trends have improved in July with the warm summer weather in Europe, economic conditions in several of our core markets continue to constrain consumer spending," said Chief Executive Jean-Francois van Boxmeer.
The world's No. 3 brewer by sales, whose brands include Amstel and Sol as well as its eponymous lager, said net profit for the six months ending June 30 was down 16.6% at 639 million euros, with last year's figure helped by a gain on the sale of its business in the Dominican Republic.
Revenue was up 6.6% at 9.35 billion euros, helped by the acquisition of the rest of Singapore-based Asia Pacific Breweries that it didn't already own, a $6.4 billion deal in November last year. On an organic basis, revenue was down 1% on 3% lower volumes, partly offset by 2% higher prices.
Since 2010, Heineken has spent more than $10 billion on acquisitions to increase its presence in emerging markets.
The company has been cutting costs to increase its profit margins and increased its cost savings target to 625 million euros from an original 525 million euros by the end of 2014.
Write to Robin van Daalen at
robin.vandaalen@wsj.com