Heineken sees profits fall

Brewing giant Heineken on Wednesday reported a half year net loss of 14% to €605m, down from €700m in the year-earlier period.


Analysts had been forecasting an increase in net profit to €716m and shares initially fell 15% on the news.
Shareholders were also reacting to a statement in which the company said volume development in Europe and the US in the coming six months is ‘challenging’ because of the uncertain economic situation.
This amounts to a profit warning, says NRC.
Analysts have been forecasting a 16% increase in profit for the whole of 2011, but Heineken says it is more likely to be around 3%. The company gives the bad weather in Europe and drop in consumer confidence in Europe and the US as the causes.
Another problem for Heineken is the situation in Mexico following the takeover in 2010 for €5.3bn of the beer activities of Femsa. Market share is down in this market.
CEO Jean-Francois Boxmeer recognises the problems in Europe and the US but says the situation in Mexico is ‘absolutely no problem’, NRC reports.

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