HOLLAND: Heineken sees anti-cartel fine dent strong H1
Heineken has posted a strong set of H1 figures, although net profit took a hammering from an anti-cartel fine earlier this year.
The Holland-based brewer said today (29 August) that net profit for the six months to the end of June fell markedly, by 30.4% year-on-year, to EUR302m (US$411m). Operating profit, however leapt upwards by 24.8%, reaching EUR906m. The figures came on the back of a 6.8% filip in sales, which came in at EUR6.1bn.
In volume terms, group beer sales rose by 8.5% to 68.1m hectolitres.
The company credited the rise in sales to the strong volumes, an improved sales mix and higher pricing. The "exceptionally mild weather" at the beginning of 2007 also leant itself to the steady performance, Heineken said.
While Central and Eastern Europe, Africa and the Far East delivered impressive sales volumes, the brewer also noted that its home draught formats increased their volume sales by 20% on the corresponding half a year earlier, coming in at 346,000 hectolitres.
In the US, Heineken Premium Light volumes grew by 30% to 402,000 hectolitres.
"In the first six months of 2007, we have shown that our drive to develop a performance driven culture within Heineken is making excellent progress," said company chairman and CEO Jean-François van Boxmeer. "Even when taking into account the exceptional and favourable weather patterns experienced in Europe in the first half, we have delivered growth ahead of expectation.
"Once again, the performance of the Heineken brand has been outstanding with double-digit volume growth and an increased share of the international premium segment. The increasing contribution of our Central and Eastern European, African, and Asian businesses shows that we are balancing the profitability of our more mature markets with the potential of our developing markets."
Van Boxmeer also highlighted Heineken's renewal of the FEMSA agreement in the US for a further 10 years, and the brewer's decision to construct a brewery in South Africa, after it regained control of the Amstel brand in the country, as providing a "stronger, more profitable operation".
In July, Heineken raised its organic net profit growth forecast for 2007 to 20%-25%, as a result of strong volume and top line growth in the first half-year, in particular in Central and Eastern Europe, Africa and Asia. The company said today that it expects volume growth to continue in the second half of 2007, albeit at a relatively more moderate pace, given the mixed weather seen at the beginning of the second half-year of 2007 and set against the challenging comparable period of 2006.
In April, Heineken was slapped with a EUR219.3m fine by the European Commission, after being found guilty of cartel activities in Holland. The brewer, which the EC claimed had collaborated in fixing prices, allocating customers and exchanging commercially-sensitive information in the country, said it would appeal against the fine.
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