AMSTERDAM: Dutch brewer Heineken expects negligible profit growth this year due to weaker demand in the United States and key European markets and the impact of a strong euro on foreign currency earnings.
The world’s fourth largest brewer, whose brands include Amstel, Tiger and Murphy’s, said its first-half net profit excluding exceptional items and goodwill amortisation grew just 1% to 334 million euros (US$372mil) and forecast an identical rate of growth for the full year.
“Growth of earnings is limited because of lower beer consumption in many markets,” chief executive Thony Ruys told a news conference on Wednesday.
Like other brewers, Heineken’s profits were hit in the first half by the global economic slowdown and the impact on tourism and leisure markets of the war in Iraq, a cold winter in North America and the SARS outbreak.
Heineken’s earnings and those of its bigger European rival, Belgium’s Interbrew, have also been dented by the rise in the euro’s exchange rate against the currencies of other countries where their beers are sold.
Including an exceptional gain of 71 million euros from the sale of its stake in Argentinian brewer Quilmes, Heineken’s first-half net profit was 21% higher at 400 million euros and sales were up 6% at 4.61 billion euros. – Reuters