By Michael Susin
Heineken lifted its profit growth target for the year after a key revenue metric rose in the first six months, beating expectations.
The Dutch brewer now expects adjusted net profit organic growth to be more closely in line with inorganic growth, rather than lower.
It expects adjusted operating profit to grow organically in the range of 4% to 8% compared with its previous guidance of low- to high-single-digit percentage growth and market expectations of 8.2%, according to a consensus forecast provided by the company.
The updated guidance came as Heineken reported that adjusted net profit--one of its preferred metrics, which strips out exceptional and other one-off items --for the first half of 2024 rose to 1.20 billion euros ($1.30 billion) from EUR1.15 billion, in line with market expectations.
However, on a reported basis, it swung to a net loss of EUR95 million compared with a profit EUR1.16 billion a year earlier and expectations of EUR985 million profit after taking a noncash impairment of EUR1.05 billion mainly related to the devaluation of its 40% stake in Chinese brewer CR Beer.
Adjusted net revenue grew organically by 5.9% to EUR17.81 billion, beating market expectations of EUR15.19 billion.
Consolidated beer volumes--which includes its namesake brand as well as more than 300 other beers such as Amstel, Red Stripe, Sol and Desperados--rose 2.1% organically, missing market expectations of a 3.2% increase. Volumes of the Heineken brand grew by 9.2%.
"In the second half, we will materially step-up investment in market and sales expenditures, with notable increases in key markets," Chairman and Chief Executive Dolf van den Brink said.
The board declared an interim dividend of EUR0.69 a share, flat from a year ago.
Write to Michael Susin at michael.susin@wsj.com
(END) Dow Jones Newswires
July 29, 2024 02:02 ET (06:02 GMT)
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