Heineken sees marginal profit decline in 2018

Heineken N.V. on Wednesday reported a decline of 1.6% in net profits for the full year 2018 to €1.9bn, caused by a €183m impairment charge in the Democratic Republic of the Congo (DRC) and acquisition costs from Brazil. In the same period in 2017, the company recorded €2.2bn in profits.

However, the company said that total revenue for 2018 grew by 3.7% to €26.81bn from the previous year, with total beer volumes up by 4.4%, helped by a boost from its Heineken brand, which grew 7.7%, its best performance in a decade. The Dutch brewer notes that its newly launched Heineken® 0.0 is now sold in 38 countries, from 17 in 2017.

The company said that operating profit margin declined by 6.4% due to the first time consolidation of Brazil, rising input costs and adverse currency headwinds.

Heineken noted that beer volumes in Africa grew by 5%, though volumes in Nigeria were adversely impacted by the weak macro-economic environment and SKU rationalisation. In Ethiopia, the company saw a boost from Sofi Malt and its new coffee variant Sofi Buna.

The company saw double-digit growth in its international portfolio brands, with Tiger, Desperados, Birra Moretti and Krušovice all doing well. In Europe volumes grew high-single digit due to the continued success of Heineken® 0.0 and Radler.

Looking forward to 2019, Jean-François van Boxmeer, chief executive officer of Heineken said, “We expect the environment to remain uncertain and volatile.”

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