Cost savings help Heineken boost profits

 
City A.M. Reporter
HEINEKEN, the world’s third-largest brewer, reported a higher than expected rise in first-half net profit yesterday after cost savings helped offset lower beer sales in Europe and the United States.

The Dutch-based brewer, whose chief brands are Heineken and Amstel, Europe’s number one and three beers, said group beer volumes fell 2.3 per cent on a like-for-like basis.

But costs savings, lower raw material and interest costs and its joint ventures led to a 17 per cent rise in net earnings.

The company said it remained cautious about beer consumption in Europe and the United States due to continued weak consumer spending and planned austerity measures, but expected volumes to grow in Latin America, Africa and Asia.

Heineken’s first-half results included two months from the beer business of Mexico’s Femsa, bought to boost exposure to faster-growing emerging markets.

Just over half of Heineken’s revenue last year came from western Europe. Heineken said the integration of FEMSA Cerveza was on track, with synergies due in the second half.

For the full-year, Heineken forecast the percentage growth of net profit to be at least in low double digits with further cost savings and price hikes continuing to have some impact.

Heineken’s net profit before one-offs increased to €621m (£508m). Analysts had on average expected a net profit of €595m.