Heineken beer shipments beat estimates on growth in Asia

[LONDON] Heineken NV, the world's second-largest brewer, reported third-quarter shipments that beat analysts' estimates as the Tiger brand in Vietnam helped drive growth in Asia.

Volume increased 2 per cent on an organic basis, led by a 15 per cent gain in the Asia Pacific region, the Amsterdam-based company said in a statement Wednesday. Analysts expected 1.4 per cent growth. Shipments of premium beer rose 3.5 per cent.

Shipments rose by more than 10 per cent in Vietnam and Cambodia, while Chinese consumers bought more of the Dutch brewer's flagship brand. Heineken is one of seven companies that has registered to bid for a stake in Saigon Beer Alcohol Beverage Corp, Vietnam's largest brewer.

The country's young population and rising middle class are fuelling beer consumption in one of the world's fastest-growing economies.

"The headlines here will read as a beat but we are pretty sure the 'whisper' consensus was higher than the official consensus," Eamon Ferry, an analyst at Exane BNP Paribas, wrote in a note to investors.

The stock fell 0.2 per cent to 78.81 euros as of 9:01am in Amsterdam.

An unusually warm third quarter helped spur demand in Europe, where consumers are increasingly abandoning mainstream lager brands for microbrew alternatives. Nine-month profit fell 30 per cent to 1.24 billion euros (S$1.9 billion) after a one-time gain of 379 million euros from the sale of Mexican packaging operations boosted results in the year-earlier period. Adverse currency shifts will reduce net income this year by about 115 million euros, based on rates as of Oct 20, Heineken said.

"Strong performance continued in key markets such as Vietnam and Mexico, with Europe also showing further positive momentum," chief executive officer Jean-Francois van Boxmeer said in the statement. The company repeated its forecast for full-year operating margin expansion and proposed extending the CEO's term, which expires in April, for four more years.

Heineken, which bought out Asia Pacific Breweries, the Singapore-based maker of Tiger beer, in 2012, has forecast an improvement of about 0.4 percentage point in its operating margin each year. The company's definition of organic growth excludes the effects of acquisitions, disposals and currency shifts.

"Volume growth has accelerated since they acquired Asia Pacific Breweries in 2012," Andrew Holland, an analyst at Societe Generale, said by phone.

"You've got to be impressed by that."

BLOOMBERG