The Dutch brewer Heineken has reiterated its profit forecast for 2002, despite the announcing it would incur an additional provision for pension costs of €13m chargeable to the operating results of the year 2002.
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Reiterating a forecast it made back in September, the company said net profit was expected to increase 11% for the full year 2002.
Heineken said the additional provision relates to the pension liabilities in the Netherlands. Also for the four years after 2002, additional provisions of approximately €13m per annum will be necessary. The exact amount will depend on developments within the capital markets.
The additional provisions are the result of a shortfall in the coverage ratio as of December 31, and as a result of a planned increase in the pension premium that Heineken pays to the Dutch pension fund, which will increase by EUR16m in 2003.
It added that the Pension and Insurance Supervisory Authority (PVK) of the Netherlands had issued stricter requirements for minimum coverage of obligations to pension funds. Additional funding will result in a ratio of 105 per cent as required by the PVK.
The additional funding will be provided by a subordinated loan of about €150m.
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