NETHERLANDS: Cartel fine punishes Heineken FY profits
Heineken has seen its full-year profits take a hammering following a ruling last year that it had been part of a cartel in the Netherlands.
The brewer said today (20 February) that net profit in 2007 fell by 33.4% year-on-year, coming in at EUR807m (US$1.18bn). The plunge came despite a 7.3% lift in total sales, which hit EUR12.56bn in 2007.
In April last year, Heineken, along with Grolsch and Bavaria, was found guilty by the European Commission of being part of a price-fixing cartel in Holland between 1996 and 1999. The brewer was stung by a EUR219.3m fine, which contributed to EUR301m-worth of net exceptional charges for the year. This compared to a net exceptional gain of EUR291m in 2006.
Stripping out the exceptional costs, however, saw Heineken deliver a 22.6% climb in net profit, to EUR1.12bn.
In volume terms, group beer sales last year were up by 5.5% to 139.2m hectolitres, with growth being reported "across virtually all regions".
The year was described as "outstanding" by company CEO Jean-Francois van Boxmeer. "We executed our plans quicker, with high impact and focus on performance and delivery of our key priorities," he said.
Looking forward, however, the brewer said it expects a 15% price increase in commodity costs. "The company expects that it will be able to fully pass on the impact of the increased input and energy costs in most of its markets," Heineken said. The company declined to estimate volume levels for this year, "due to the uncertainties around the possible impact of worldwide consumer price inflation and the effect of weakening economies on consumer spending and beer consumption".
The company concluded by saying that it expects its joint acquisition with Carlsberg of Scottish & Newcastle to complete in the second quarter of this year, as well as proposing a share dividend of EUR0.70, a 17% lift on the dividend paid a year ago.
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