Heineken, the world’s biggest brewer, has reported better than expected first half earnings, but warned a weak spring in Europe will hold back revenues. Shares dropped nearly three per cent in early trading.
The group said operating profit before on-off items grew five per cent to €1.45bn (£1.25bn) – beating analyst expectations of €1.42bn. This was driven largely by a seven per cent jump in emerging markets, which now account for half the group's earnings.
The company added it has achieved €139m of savings in the first half of the year – mainly from the Americas and western Europe.
But beer volumes fell by three per cent on an organic basis, driven primarily by an eight per cent decline in western Europe following cold weather and a tax hike in France.
Heineken expects no organic growth this year.
For the remainder of the year, economic uncertainty and ongoing weak consumer sentiment is expected to persist across many key markets. Although Heineken benefited from better weather conditions in July in western Europe and anticipate improved volumes in some developing markets, Heineken does not expect a material change to underlying trading conditions across the majority of its markets.