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Heineken Posts Rise in H1 Operating Profit

Posted on: Wednesday, 29 August 2007, 12:13 CDT

Dutch brewing group Heineken has reported a 24.8% rise in first-half operating profit to E302 million, while net profit fell 30.4% as a result of an anti-cartel fine earlier in the year.

Reported net profit was down at E302 million, reflecting E240 million of exceptional charges, compared with E28 million exceptional gains in the first-half of 2006.

Heineken also increased its full-year forecast of organic net profit growth of 20%-25%, which was upgraded in July from 10-13%, mainly as a result of exceptionally mild weather in Europe in the first few months of 2007.

The Amsterdam-based group said revenue grew 8.0% organically, driven by strong volumes, an improved sales mix and higher pricing. Consolidated beer volumes amounted to 58.2 million hectoliters, up 9.3%; of this 8.3% was organic and 1% the effect of first-time consolidations.

Heineken said in large parts of Europe, beer markets benefited from exceptionally mild weather in the first few months of 2007. Strong increases in volume were realized in Central & Eastern Europe, Africa and the Far East. Innovation continued to contribute positively to revenue. Volume sold in new draught beer formats, such as DraughtKeg, increased 20% versus the first-half of 2006, totaling 346,000 hectoliters.

Jean-Francois van Boxmeer, chairman and CEO, said: "In the first six months of 2007, we have shown that our drive to develop a performance driven culture within Heineken is making excellent progress. Even when taking into account the exceptional and favorable weather patterns experienced in Europe in the first half, we have delivered growth ahead of expectation.

"The ongoing focus on our key priorities has resulted in strong, organic top line growth and continued achievement against our ambitious cost reduction targets.

"The increasing contribution of our Central and Eastern European, African, and Asian businesses shows that we are balancing the profitability of our more mature markets with the potential of our developing markets.

"Additionally, I am pleased that in the first half of the year we have taken two significant steps in building our business. Firstly, the renewal of the FEMSA agreement in the USA for a further 10 years allows our American operation to mature into a true portfolio business. Secondly, our decision to construct a brewery in South Africa, following us regaining control of the Amstel brand, will mean a stronger, more profitable operation."

Source: Datamonitor

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