Revenue increase fueled by gains for Tiger beer in Vietnam
Brewer’s first-half operating profit beats estimates
Heineken NV, the world’s second-largest brewer, outshone rival consumer-goods companies in the first six months of the year as emerging economies in Asia and Africa drove growth.
Revenue increased 5.7 percent in the first half as the Dutch brewer took the crown as the industry’s best performer from Budweiser-maker Anheuser-Busch InBev NV. Heineken’s beer volume grew fastest in the Asia-Pacific region as demand for its Tiger brand surged in Vietnam, one of the company’s largest markets alongside Mexico and Nigeria.
“We delivered strong results in the first half year, with all four regions contributing positively to organic growth in volume, revenue and operating profit,” Chief Executive Officer Jean-Francois van Boxmeer said in a statement. Heineken shares were down 0.6 percent in early trading in Amsterdam.
Adjusted operating profit rose 5.9 percent to 1.81 billion euros ($2.12 billion), the Amsterdam-based company said. Analysts expected 1.75 billion euros. Anheuser-Busch InBev NV reported earnings that soared past estimates last week on cost-cutting after its acquisition of SABMiller. Heineken has bid for 1,900 pubs from Punch Taverns in the U.K. and is doubling down on investment in Africa, having opened a brewery in Ivory Coast this year and expanded operations in the Democratic Republic of the Congo.
Conditions in Russia and Africa will remain challenging in the second half, Van Boxmeer said in an interview. The company’s outlook in Nigeria is improving on the country’s slightly higher oil output, Chief Financial Officer Laurence Debroux said.
Total beer volume rose 2.6 percent on an organic basis, compared with the estimate of 1.8 percent, as Heineken seeks to quench the thirst of developing markets outside Europe, which account for about half of its turnover.
A strong underlying performance is likely to be offset by recent gains in the euro, leaving full-year profit estimates “broadly unchanged,” Jefferies analysts said in a note.