Heineken beats estimates as customers unfazed by inflation

HEINEKEN reported better-than-expected beer sales as higher prices did little to stop customers from drinking more amid a rebound at bars, cafes and restaurants around the world.

The world’s second-largest brewer’s first-half beer volumes rose 7.6 per cent on an organic basis, better than the 5.73 per cent average analyst estimate, the Dutch brewer said in a statement Monday (Aug 1). Organic revenue rose 22 per cent to 16.4 billion euros (S$23.1 billion), driven by price increases, good weather in Europe and a recovery in Latin America. 

“Our actions on pricing, revenue management and productivity offset significant inflationary pressures in our cost base,” chief executive Dolf van den Brink said.

Heineken reiterated its outlook for modest growth this year as a rebound in demand is clouded by Russia’s war in Ukraine and price growth pressures. It revised its guidance for 2023. 

“We will move from an operating profit margin objective towards delivering operating profit (beia) organic growth, in the range of a mid to high-single digit,” the company said.

The Dutch brewer reported adjusted net profit of 1.33 billion euros for the half, an organic growth of 40 per cent from a year earlier. Heineken has previously said it expects an impairment of 400 million euros due to its retreat from Russia amid the war in Ukraine.

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Earlier this year, the beermaker warned it was facing the worst inflation in a decade and said consumers may cut back on beer, threatening the industry’s recovery from the pandemic. BLOOMBERG