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Heineken, the world’s second-biggest brewer, has tempered expectations for annual profit growth, saying higher prices hit demand last year.
In its latest results, published on Wednesday, the Amsterdam-listed group said it expected operating profit growth of between low and high single digits in 2024. Analysts had forecast a figure of 9.9 per cent.
Shares in the company, which owns brands including Amstel, Birra Moretti and Red Stripe, dropped 6 per cent in early trading.
Volumes fell 4.7 per cent last year, more than analysts had expected, after Heineken increased prices 10.2 per cent on average. It made an operating profit of €3.2bn in 2023, down from €4.3bn in 2022.
Chief executive Dolf van den Brink told the Financial Times that Heineken had added the low single digit to the range because of uncertainty about the economic and geopolitical outlook.
“It’s still a broad range that includes mid to high single digits,” he said, adding that he was “cautiously optimistic”.
Heineken said price rises to offset “very high input and energy cost inflation and volatile macroeconomic conditions in some key markets affected our volume momentum”.
The forecast was “disappointing”, said RBC Capital Markets analyst James Edwardes Jones, adding that investors had expected falling commodity costs would boost margins.
Many companies have continued to increase prices despite declining commodity costs.
In Asia, Heineken recorded a 10.6 per cent drop in beer sales volumes, primarily because of an economic slowdown and stricter drink-driving rules in Vietnam, which accounts for just under 10 per cent of group profits, according to Bernstein. European sales volumes fell 5.4 per cent in the year, but recovered slightly to a 3.4 per cent decline in the final quarter.
Volumes in the country’s Africa, Middle East and eastern Europe region dropped 6.3 per cent, mainly because of Heineken’s exit from Russia and losses in Nigeria, where inflation and economic reforms have dented consumer spending.
Heineken said currency fluctuations had resulted in a 3 per cent hit to net revenue.
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