AMSTERDAM, Oct 28 — Heineken NV, the world's third-largest brewer, hiked its profit forecast for 2009 to double-digit growth as it cut costs and kept pricing high enough to offset a beer volume decline driven by the recession.
Volumes fell by 4.7 per cent on a like-for-like basis in the July-September period from a year earlier. Analysts had expected a 5.4 per cent decline after falls of 6.3 and 6.7 per cent in the first two quarters.
Heineken said beer sales volume in Europe, Asia and the Americas continue to be under pressure from a weaker global economy, and that consumers were switching to cheaper private label beer brands — a market where Heineken does not compete.
Third quarter revenue was down 0.4 percent from a year earlier to €4.07 billion (RM20.6 billion), helped by higher pricing. Analysts polled by Reuters had expected, on average, revenue of €4.12 billion.
Still, Heineken said it was able to squeeze out growth in earnings before interest and taxes (EBIT) in the "mid-teens" despite the lower volume, which in turn will help the brewer post a net profit increase in 2009 in the "low double digits" versus the previous forecast for high single digit growth.
As part of its cost-cutting programme, Heineken said it closed breweries in France and Spain, and will close a further four breweries and three malting plants. The closures and other cost-cutting measures will result in a charge of €130 million to €150 million for 2009.
Heineken, whose chief brands are Heineken itself and Amstel, Europe's number one and three beers, bought Scottish & Newcastle with Carlsberg for £7.8 billion (RM43.6 billion) in 2008, chiefly getting the British assets.
World number two SABMiller saw sales fall 1 per cent in the six months to September with a 6 per cent decline in Europe offset by double-digit growth in China.
Mexican brewer and bottler FEMSA will also report earnings later today. The group has put up for sale its beer business, Mexico's number two brewer and maker of Dos Equis and Tecate. Heineken distributes its beers in the United States, but is likely to be beaten by SABMiller for the US$7.5 billion plus brewing operation.
Heineken is busy reducing debts after the S&N purchase and may have a limited ability to issue shares with the Heineken family in control. — Reuters
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