Brewer toasts its half-year results but warns of hiccups
Published 26/08/2010 | 05:00
BEERMAKER Heineken yesterday reported strong results for the first half of the year but warned that the European and US markets would remain weak in the near term.
The brewer beat analyst's expectations by reporting a 42pc increase in net income to €695m on revenue that increased 5.2pc to €7.5bn. Diluted earnings per share were €1.31.
Heineken's chairman and chief executive, Jean-Francois van Boxmeer, said developing countries were key for growth.
"Trading conditions remained challenging in Europe and the USA, but we realised strong group beer volume growth in Africa and Asia," he said.
"The effectiveness of our premium strategy was reinforced by the continued strong performance of the Heineken brand, which once again outperformed our broader portfolio and the overall beer market."
The company said it remained "cautious" on Europe and the US in the face of "continued weak consumer spending" and public spending cuts across the two continents.
Beer volumes in Western Europe fell 2.5pc but Africa and the Middle East saw a 7.2pc increase.
Despite the negatives, the Amsterdam-based brewer said it expected a net profit increase to be "at least in low double digits" on the back of debt reduction and the "unlocking" of synergies and improved performance of recent acquisitions.
An interim dividend of 26c per share will be paid on September 3.
"Organic net profit growth is very strong and in particular we saw good delivery on the cost savings," said Trevor Stirling, an analyst at Sanford Bernstein in London. "Overall, this is a good set of numbers."