Heineken warns on rising costs, Covid as H1 profits soar

Brewing giant Heineken on Monday reported better-than-expected interim profits but warned of a weaker second half due to higher costs and the Covid-19 pandemic.

The maker of Heineken, Moretti, Tiger and Sol, said operating profit before one-offs doubled to €1.63bn, compared with expectations €1.22bn.

Net revenues rose 14.1% to €9.97bn in the six months to June 30 from a year ago, when the pandemic forced the closure of restaurants and bars around the world. The company swung from a first-half net loss of €297m to a profit of €1.03bn, and restored its interim dividend, paying €0.28 a share.

Chief executive Dolf van den Brink said rising raw material costs and the impact of the pandemic, particularly in its Asian markets, was a “reason for caution”, adding they would have a material effect next year. The company earlier this year announced 8,000 job cuts.

Heineken maitained full-year guidance and expected full-year financial results to be weaker than pre-pandemic levels.

Beer volumes rose in most regions in the first half, with growth of almost 17% in the Americas. The brewer's famous own-named brand, which sponsored the Euro 2020 football tournament, was a strong performer.

Volumes in Asia-Pacific fell 1% as the company cited renewed restrictions in important markets in the region as the Delta variant of the virus spread through the region.

“We expect the rest of the year will continue to be volatile, with some markets gradually recovering while others continue to implement restrictions until vaccinations are more broadly rolled out,” Heineken said.