Heineken lowers earnings forecast as beer consumption drops
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Consumers bought less beer after Heineken imposed major price increases.
PHOTO: REUTERS
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GENEVA – Heineken lowered its earnings guidance as consumers bought less beer after the brewer imposed major price increases, especially in markets such as Vietnam.
Operating profit slumped 22 per cent on an adjusted basis in the first half of 2023, the Amsterdam-based brewer said on Monday.
For the full year, Heineken forecast stable to mid-single digit operating profit growth.
Brewers are struggling to pass high raw material costs onto consumers without driving consumers away in search of cheaper brands.
Heineken is the first of the big global beer makers to report first-half results, and its comments may portend difficulties for rivals Anheuser-Busch InBev and Carlsberg.
Previously, Heineken had a forecast of mid- to high-single digit annual operating profit growth.
The Dutch brewer forecast that cost inflation will ease in 2024, which will lift pressure to raise prices.
Heineken increased the impairment for its Russian business to €201 million (S$294 million).
The company said it is still working to sell the unit
Revenue rose less than expected in the first half, and beer volumes dropped more than expected.
In 2022, the company increased pricing by 14 per cent, the most in at least a decade.
Heineken predicted pricing will moderate and volumes will decline by a low single-digit percentage in the second half of 2023.
The company is counting on a turnaround in profit during the period. BLOOMBERG
