Bitter year for Heineken as inflation hits profits, beer sales

Feb14,2024



The Hague: Dutch Brewer heineken Annual decline was recorded on Wednesday profits Since the decline in beer volume has been “challenging” market conditions“including high inflation,
The world's second-largest brewer after AB InBev said it expected net profit to hit 2.3 billion euros ($2.5 billion) in 2023, compared with 2.7 billion euros a year earlier.
The company said beer volumes declined 4.7 percent overall, with 60 percent of the decline due to sharp declines in Nigeria and Vietnam.
“This year, Heineken has had to prioritize pricing to balance unprecedented levels of commodity and energy inflation,” the brewer said.
It said inflationary pressures eased in the second half of the year, but predicted that the economic environment “will remain a factor of uncertainty” until 2024.
Higher prices pushed the total sales figure to 36.3 billion euros, up from 35 billion euros the previous year.
It forecasts that future operating profit will be in the “low to high-single-digit” range, with net profit being lower due to currency and tax impacts.
There was little cheer on the Amsterdam stock exchange, with Heineken shares down more than five percent at the open, one of the biggest declines in an overall flat market.
Heineken's half-yearly report published in July gave investors a sense of the disappointment to come, with net profit falling 8.6 percent as the company raised prices.
In March, Heineken was forced to apologize over “ambiguity” in its pledge to close business in Russia following its invasion of Ukraine.
A Dutch investigative website reported in February that although Heineken had stopped selling its namesake beer in Russia, it had launched dozens of new products.
In August, the company announced its exit from Russia entirely, selling its operations to Ernest Group, the largest Russian manufacturer of cosmetics, household goods and metal packaging.
In its home market of the Netherlands, the Dutch Brewery Association said so beer sales The total fell by more than five percent in 2023 due to bad summer weather and inflation.
For the first time since 2001, the number of breweries operating in the Netherlands has declined, “as brewing beer is becoming less profitable,” the group said.



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