Heineken H1 revenue falls 16% due to Covid-19; shares dip

Amsterdam

HEINEKEN'S first-half net revenue fell 16.4 per cent as the impact of coronavirus-related lockdowns intensified in the second quarter, the Dutch beer maker said in an unscheduled preliminary release, sending its shares down more than 5 per cent.

The fall was driven by a 13.4 per cent organic decline in total consolidated volume and a 3.6 per cent drop in net revenue per hectolitre, the world second-largest brewer said, adding that beer volume dropped 11.5 per cent in the first-half of 2020.

"After a low point in April, volume started to gradually recover into June as lockdowns were lifted around the world and customers restored depleted inventories," Heineken said, adding that beer volumes were most affected in the Americas, Africa, the Middle East and Eastern Europe.

The company's January-June preliminary operating profit and net profit plummeted by 52.5 per cent and 75.8 per cent respectively, it said.

Heineken's Danish rival Carlsberg said last week it had seen a smaller than forecast drop in first-half operating profit as its key Chinese market rebounded strongly during the second quarter.

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Heineken said its operating profit was "disproportionately" affected by restaurant and bars closures in the crisis, and said it had booked 500 million euros (S$793.8 million) in exceptional items on impairments for tangible and intangible assets, without giving details.

"Heineken pre-announces slightly less bad top-line," Credit Suisse analysts commented in its first-take note to clients, adding that the impact on margins and organic earnings before interest and tax was slightly worse than it expected.

Heineken will report final first-half results on Aug 3. REUTERS