Brewer Heineken curbs profit hopes as Americas slip
Dutch company forecasts operating profit will be at lower end of its previous guidance
Heineken, the world’s second-largest brewer, forecast operating profit this year would be at the lower end of its previous guidance after an unexpected dip in third-quarter sales in the Americas partly offset strong growth in Asia.
The Dutch maker of Heineken, Europe’s top-selling lager, as well as Tiger, Sol and Strongbow cider, said on Wednesday that operating profit before one-offs would rise by about 4 per cent on a like-for-like basis in 2019. It had previously forecast mid-single-digit percentage growth. However, after a mere 0.3 per cent increase in the first half of the year, due in part to higher packaging costs, market expectations had already shifted down to around 4 per cent.
Heineken shares were down 1.9 per cent at €94.86 shortly after the market open, although they were still up 23 per cent in the year to date. Consolidated beer volumes rose by 2.3 per cent year-on-year to 64.2 million hectolitres in the July-September period. The figure was in line with expectations in a company-compiled poll. The Asia-Pacific region was the clear outperformer, with a 13.9 per cent increase.
Vietnam, Heineken’s second most profitable market, registered a double-digit percentage rise as the company pushes deeper into the country. By contrast, beer sales in the Americas unexpectedly fell, by 0.5 per cent.
Heineken said sales of cheaper beers there had declined after a price rise, while volumes of higher-priced beers such as Heineken, Amstel and Devassa grew by a double-digit percentage. In Mexico, the company’s largest market, sales were up by a low single-digit percentage, helped by the launch of low calorie Amstel Ultra.
Heineken’s beer sales in Europe, where it is the market leader, grew by 1.6 per cent, against expectations of a decline. Growth in Africa, the Middle East and Eastern Europe was also 1.6 per cent, but below expectations. -Reuters