Heineken Cuts Costs After 1Q Net Profit Fell Sharply Due to Pandemic -- Update

--Heineken net profit fell sharply in the first quarter due to coronavirus

--Board members and executives are taking a 20% pay cut and the board won't declare an interim dividend this year

--Beer volume in the quarter fell 2.1% year-on-year, with a 14% peak in March.

By Matteo Castia

Heineken NV reported Wednesday a sharp drop in net profit for the first quarter due to a pandemic-induced volume drop in March, and said that so far only limited benefits came from its mitigating actions.

The Dutch brewer--which owns the Sol, Birra Moretti and Tiger beer brands--made a quarterly net profit of 94 million euros ($101.9 million) compared with EUR229 million a year earlier. Beer volume decreased 2.1% year-on-year, with a 14% drop in March.

Earlier this month, Heineken withdrew its full-year guidance due to the uncertainty associated with the pandemic and said it expected a first-quarter reduction in beer volume of 2%.

Total organic volume rose 5% in the quarter, driven by strong trading in U.S., against an estimated fall of 4%.

Heineken said the board and executive team has agreed to a 20% salary cut between May and December in an attempt to preserve resources amid the crisis.

The company said it won't pay an interim dividend this year.

Write to Matteo Castia at [e-mail]

(END) Dow Jones Newswires

April 22, 2020 05:01 ET (09:01 GMT)

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