Online Reporter
Heineken NV’s volumes unexpectedly grew in the second quarter as strong beer demand in Asia and Africa offset persistent weakness in Europe and the Americas.
The Dutch brewer said yesterday that consolidated volumes, which include drinks sold by Heineken at its subsidiaries, rose 0.9 percent on an organic basis, compared with analysts’ estimates for a slight decline.
When beer sales from licensed partners are included, total organic volumes rose 1.9 percent.
The results give incoming Chief Executive Officer Rafael Oliveira an early boost ahead of his arrival from JDE Peet’s NV in October.
The first outsider to lead Heineken, Oliveira is taking over at a time of sluggish sales in Europe and the US as people curb their alcohol consumption and rein in spending in response to higher everyday costs.
Heineken shares rose as much as 3.5 percent in Amsterdam trading. They’re up about 14 percent so far this year, compared with the 34 percent gain in larger rival Anheuser-Busch InBev SA.
Heineken has lagged AB InBev and Carlsberg A/S in turning around the business after a post-pandemic slump. It’s in the midst of a cost-cutting drive that includes reducing about 7 percent of its global workforce, or 5 000 to 6 000 roles.
The brewer said Wednesday that it already cut about 3 000 full-time employees in the first half.
The company has relied on demand for beer in emerging markets for growth, with rising income in countries such as Vietnam and South Africa driving sales.
Total volumes jumped 13 percent in Asia-Pacific and 3.5 percent in Africa and the Middle East in the second quarter, while slumping 4.1 percent in the Americas.
Heineken reported adjusted operating profit of €2.17 billion ($2.5 billion) in the first half, in line with expectations.
Chief Financial Officer Harold van den Broek told reporters that Heineken has lost out to rival brewers in the Americas.
“It’s a bit contrary to what our colleagues from the industry are saying,” he said on a call.
“In that market we lost some share, so we’re not happy with our own performance in the Americas.”
At the start of the soccer World Cup, AB InBev said it saw boosted demand for Michelob Ultra in the US and other beers in Mexico, which along with Canada hosted the tournament.
The brewer maintained its forecast of 2 percent to 6 percent operating profit growth for the year.
“With the new CEO not starting until October and with continued macro-geopolitical uncertainty, it is no surprise that guidance is unchanged,” said Jefferies analysts Edward Mundy and Sebastian Hickman in a note.
The outlook is based on the assumption of a temporary rather than prolonged disruption in global energy trade following the outbreak of war in the Middle East, they added. – Bloomberg
