Heineken cheers profit jump, but outlook ‘below 2019’

Heineken on Wednesday posted a €2.6 billion (£2.19bn) jump in year-on-year net profit three-quarters into 2021, but reported a major slump in beer sales in Asia markets because of Covid-19 restrictions.

Net profit for the first nine months was up to €3.082 billion as opposed to €396 million last year and €1.66 billion in 2019, the world’s number two brewer said in a statement.

But the profits were boosted by an exceptional gain of €1.3 billion from a remeasurement to fair value of a previously held equity interest in United Breweries in India – and full year expectations remained below that of 2019.

Heineken took control of United Breweries – which makes India’s popular Kingfisher brand – in July, pushing its holding to 61.5 percent from 46.5 percent before.

Overall beer volumes grew by four percent since the start of the year, but the Amsterdam-based brewer saw a 37.4 percent dip in key markets such as Cambodia, Malaysia, Indonesia and Vietnam in the third quarter.

“As anticipated, our Asia Pacific region was deeply impacted by the pandemic,” Heineken chief executive Dolf van den Brink said, adding “we see the first signs of recovery.”

Heineken brand continued its strong momentum and grew volume by 8 per cent in the quarter and 15.1 per cent for the first nine months of the year. Volume grew double-digits year to date in more than 50 markets.

Heineken 0.0 grew in the low-twenties, with a particularly strong performance in Brazil, Mexico, the US and the UK.

But Van den Brink said that markets remained “volatile and we are responding accordingly.”

“Therefore, our expectations stay unchanged, with full year results remaining below 2019,” he said.

In the UK, total volume was down by a low-single-digit, in line with the market, impacted by logistics disruptions. The on-trade grew double digit, while the off-trade declined in the low-teens. The premium portfolio continued its growth momentum, driven by Birra Moretti and Desperados.