AMSTERDAM -- Heineken NV has reported a 26% rise in first-half net profit with strong sales in the Americas and thanks in part to a surge in beer drinking during the soccer World Cup, reported The Wall Street Journal.
Heineken, the world's fourth-largest brewer by volume after InBev SA, Anheuser-Busch Cos Inc. and SABMiller PLC, said net profit rose to 433 million Euros ($548.7 million U.S.) from 345 million Euros ($437.2 million U.S.) a year earlier. Heineken's sales rose 12% to 5.74 billion Euros ($7.3 billion U.S.) from 5.14 billion Euros ($6.5 billion [image-nocss] U.S.) in the first half of 2005.
Heineken, which reports earnings twice annually, reiterated its outlook, stating that full-year organic profit growth, or profit stripped of exceptionals and amortization, will be slightly above 10%. In the first half of 2006, this growth rate was 14%.
We have made a strong start to the year, Heineken CEO Jean Francois van Boxmeer said, according to the report. Our performance over the first six months demonstrates that we are beginning to deliver against the four priorities I have set for the business: accelerating top-line growth, increasing efficiency, speeding up implementation and focusing on selected market opportunities.
Heineken broke down the sales increase into 4.7% from greater volumes, 1.6% from higher prices, 3.3% from new acquisitions and 2% from currency changes. The company said it performed especially well in the United States.
Overall beer market conditions in the USA improved only slightly, but import and specialty beers performed strongly, Heineken said. In the first half of 2006, Heineken's group beer volume also grew by 12% to 62.8 million hectoliters, from 56.2 million hectoliters.
In Western Europe, Heineken said the impact from the World Cup was most noticeable in host nation Germany, with increases in the Netherlands, France, Britain and Spain.
Meanwhile, Amsterdam-based Heineken said that results in the second half of 2006 will be tough to compare with the second half of 2005, given the strong growth during that period. This is not a real surprise as we expected a slow down, F. van Lanschot analyst Paul Hofman told the Journal. He added that Heineken's results were in line with expectations.
Heineken's results are strong, ING Wholesale Banking analyst Gerard Rijk told the newspaper, adding: Sales and operating profit were higher than expected.
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