Shares in the Dutch brewing group, Heineken, fell sharply after the company said that profits would be flat for the first half of the year. Heineken attributed the lack of profit growth to the strong euro and slow beer sales.
Heineken said it had met various adverse conditions in a number of beer markets such as slow economic growth, the Iraq conflict, unseasonal weather in Europe and the US and the SARS outbreak in the Far East. The company registered lower beer sales in the US, the Netherlands, Greece, France and the Far East.
The company’s spokesman, Albert Holtzappel, said the strong euro had a negative effect of €25m on the brewer’s operational result for the first half of the year, adding that the lower dollar to euro exchange rate could hit the company’s 2003 net profit to the tune of around €30m. Heineken is also facing higher pension costs.
The company said net profit excluding non-recurring items will be on a par with the first half of last year. Heineken’s shares fell by 8.7% to €31.11 following the announcement.
