- H1 working revenue 1.63 bln euros vs consensus 1.22 bln euros
- Sees continued COVID impression, notably in Asia, Africa
- Larger commodity prices to begin hitting in second half
BRUSSELS, Aug 2 (Reuters) – Dutch brewing big Heineken expects the COVID-19 pandemic to weigh on key Asian markets for the remainder of the yr and rising prices to dent margins, it stated after posting a greater than anticipated doubling of first-half earnings on Monday
Chief Government Dolf van den Brink, who has been on the helm of the world’s second-largest brewer for a yr, stated the corporate was happy with the robust first half, however expressed warning, with outcomes anticipated to stay beneath pre-pandemic ranges in 2021 as a complete.
“In contrast to final yr, we now see important impression on the enterprise in southeast Asia,” Van den Brink advised Reuters in a phone interview on Monday, referring to the fallout from the COVID-19 pandemic.
He stated Vietnam, a prime three marketplace for Heineken, was a priority, with lockdowns imposed in its strongholds in cities and the south of the nation. Elsewhere, the corporate’s Malaysia brewery is shut and decreased tourism is hitting Indonesian gross sales.
The maker of Europe’s top-selling lager Heineken, Tiger and Sol, beforehand forecast an enchancment in market circumstances within the second half of 2021, relying on vaccine roll-outs.
Rising commodity prices, together with for barley, sugar and aluminium for cans, would begin affecting Heineken within the second half of 2021 and would have a “materials impact” in 2022, when hedging contracts have been not mitigating the will increase.
Advertising and marketing bills would even be skewed in the direction of the second half as bars reopened.
Anheuser-Busch InBev , the world’s largest brewer, final week reported a surge in beer gross sales within the second quarter, however larger can and transport prices curbed earnings.
Heineken offered nearly 10% extra beer within the first half than a yr in the past and Van den Brink stated the corporate would search to be “assertive” on pricing, having achieved practically 10% larger costs per hectolitre of beer within the Americas and Africa/Center East within the first half.
Its shares rose nearly 2% in early buying and selling earlier than giving up many of the positive aspects to face 0.5% larger at 98.74 euros by 0830 GMT.
Trevor Stirling, beverage analyst at Bernstein stated he anticipated consensus earnings estimates for this yr to rise.
“The inflationary surroundings will likely be a lot larger subsequent yr. How a lot can they recuperate in pricing?”
The corporate stated greater than half of the financial savings beneath its three-year plan to avoid wasting 2 billion euros and restore revenue margins to pre-pandemic ranges by 2023, partly via slicing 8,000 jobs, must be achieved by the tip of 2021.
First-half working revenue earlier than one-offs doubled to 1.63 billion euros ($1.93 billion), in contrast with the common forecast in a company-compiled ballot of 1.22 billion euros.
($1 = 0.8427 euros)
Reporting by Philip Blenkinsop; Enhancing by Kirsten Donovan, Christian Schmollinger and Uttaresh.V