Heineken profits slump 14%, warns on outlook
Dutch brewer Heineken Wednesday reported a 14 percent slump in net profit for the first half, saying Europe's bad weather in July and August would negatively affect its performance for the rest of the year.
The global beermaker's share price plunged more than 14 percent on the Amsterdam Stock Exchange's AEX following the announcement.
Heineken's net profit for the six months to June stood at 605 million euros ($873 million dollars), down from 700 million euros a year earlier despite 3.3 percent in organic growth in revenue to 8.36 billion euros.
"The reported net profit decline primarily reflecting a significant exceptional gain last year," Heineken said in a statement from Amsterdam.
Consumers however did quaff 104.1 million hectolitres of Heineken's beer in the first half, up 4.2 percent.
In western Europe, which accounts for almost half Heineken's sales by volume, sales increased 1.0 percent overall.
"Heineken has witnessed volume weakness in the high-selling season of July and early August 2011, reflecting poor weather conditions in Europe, in combination with lower consumer confidence in some key markets," the company said.
"This will affect second half 2011 volume and profit performance and therefore Heineken expects full year net profit (before exceptional items and amortisation) to be broadly in line with last year."
It added that parts of Europe and the United States were expected to "remain challenging given the current economic uncertainty, high unemployment and ongoing weak consumer confidence."
"The forecast is disappointing," Gerard Rijk, an analyst at Dutch banker ING told AFP. "The effects of the bad weather and low consumer confidence is more important than what I had expected."
The Dutch brewer, founded in the nineteenth century in Amsterdam, produces and sells over 200 brands of beer and cider including its top 10 global brand with the same name. The group employs over 70,000 people worldwide.
© 2011 AFP