Dutch Heineken books less profit in 2008
Despite a 74 percent drop in 2008 net profit, Heineken sees no real cause for concern.
AMSTERDAM—Dutch brewer Heineken reported Wednesday a 74 percent drop in 2008 net profit, but said it remained optimistic as beer consumption was "relatively resilient" in hard economic times.
"Past experience indicates that beer consumption as a whole is relatively resilient in a period of economic downturn," the company said.
Heineken announced that net profit dropped from 807 million euros (1.012 billion dollars) in 2007 to 209 million euros last year.
Revenue grew 27 percent to 14,3 billion euros on the back of a 16 percent rise in beer sale volumes to 162 million hectolitres.
But low profits from new businesses and related financing costs ate away at profits, said the company which, together with Carlsberg of Denmark, bought British group Scottish and Newcastle last year.
"In the face of deteriorating economic conditions, we have delivered a strong organic profit growth ahead of our forecast," Heineken chief executive Jean-Francois de Boxmeer said in a statement.
"This has been driven by robust pricing, higher volumes, better sales mix and a reduction in fixed costs."
The company entered 11 new markets and was now the number one or number two brewer in 59 of the 66 markets in which it operated, the statement said.
"The strategic potential of our new markets remains strong. However, the economic downturn means that it will take longer to achieve the goals we have set for them."
Britain, in particular, performed below expectations as a combination of recession, unprecedented excise duty rises, a smoking ban and a fall in the value of the British pound made the market "exceptionally challenging," said the company.
"As we have experienced in recent months, our business is robust but not immune from the challenges posed by the global economic downturn."
Heineken said it was Europe's largest beer brewer and the world's third largest by volume.