Heineken profits down on foreign assets

Brewing group Heineken on Wednesday announced plans to cut spending because of a sharp downturn in its 2008 earnings.

The biggest Dutch brewer said net income fell to €209m, compared with €807m a year earlier. Profit was dragged down by write-downs related to its British, Indian and Russian assets, the company said in a statement.
But organic net profit was up 11% and beer sales in volume terms rose 3.5%, Heineken said.
‘Our business is robust but not immune from the challenges posed by the global economic downturn. Therefore, we have in place a rigorous, company-wide focus on cash generation and cost reduction,’ said CEO Jean-François van Boxmeer.
In particular, British brewing group Scottish & Newcastle had not met expectations, Van Boxmeer said.
‘The combination of recession, on-trade downturn, unprecedented excise duty rises, the smoking ban and the fall in the value of the British pound made the market exceptionally challenging,’ Van Boxmeer said.
For 2009, Heineken ‘expects that the underlying downward trend in the number of employees will continue due to cost-reduction and efficiency improvement programmes’.

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