Heineken Cuts 2023 Guidance After APAC Region Weighed on 1st Half Earnings -- Update

By Anthony O. Goriainoff

Heineken on Monday cut its full-year outlook after reporting a fall in key earnings for the first half, largely due to lower volumes in the profitable Asia Pacific region.

The Dutch brewer now expects adjusted operating profit growth between zero and a mid-single digit this year. It previously guided for a mid- to high-single-digit rise.

The change in guidance sent shares of the world's second largest brewer down as much as 7.5% in early trade. Shares at 0824 GMT were down 5.1% at EUR91.94 having fallen to a low of EUR90.66 earlier in the session.

For the half year Heineken made an operating profit before exceptional items and amortization of acquisition-related intangible assets--one of its preferred metrics--of 1.94 billion euros ($2.14 billion), compared with EUR2.155 billion for the same period a year earlier. This was a fall of 8.8% on an organic basis.

Within this, Asia Pacific adjusted operating profit fell 34% to EUR400 million.

"Demand in APAC was considerably softer than foreseen, due to an economic slowdown and our own underperformance in Vietnam," the company said.

However, the company said it expects a strong turnaround in the second half of the year.

Net profit for the period was EUR1.16 billion compared with EUR1.27 billion a year earlier and a forecast of EUR1.31 billion, taken from Factset and based on one analyst's estimate. Overall volume fell by 5.6%.

Revenue for the period rose to EUR17.44 billion from EUR13.49 billion, beating consensus forecasts of EUR14.91 billion, based on four analysts' estimates taken from FactSet.

"The revenue growth and improvements in productivity were more than offset by the significant inflationary pressures in our input and energy costs and the front-loaded incremental investments to grow the power of our brands, digitalization, capability and sustainability agendas," the company said.

Write to Anthony O. Goriainoff at [e-mail]

(END) Dow Jones Newswires

July 31, 2023 05:11 ET (09:11 GMT)

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