By Emma Rumney
LONDON, April 23 (Reuters) – Heineken’s first-quarter revenues and volumes beat forecasts on Thursday, but the Dutch brewer said energy costs and inflation – driven up by the war in Iran – could hit demand for its beers.
Sustained cost-of-living pressures, shifts in drinking habits and U.S. tariffs meant the world’s No. 2 brewer, behind Anheuser-Busch InBev, was already expecting another difficult year.
Now, the conflict in the Middle East has made the fuel needed to brew its products and make glass bottles more expensive and threatens to push up prices on a range of consumer goods, which could further dent drinkers’ beer spending.
The company reported a 2.8% rise in first-quarter organic net revenue, ahead of analyst expectations for a 2.3% rise. Total volumes, which analysts had forecast to be flat, were up 1.2% organically.
JOB CUTS AND A SEARCH FOR A NEW CEO
Heineken has already announced plans to cut 6,000 jobs and is searching for a new CEO after Dolf van den Brink’s abrupt resignation in January. The brewer, which makes Tiger and Sol alongside its namesake lager, made no mention of its efforts to replace him in its results statement.
“Global trade has become more complex and volatile, with impacts on energy availability and costs in certain markets. This leads to inflationary pressures, which might affect consumer sentiment in the medium-term,” van den Brink said, without mentioning the war directly.
The company reiterated its full-year outlook for between 2% and 6% organic operating profit growth.
It said its outlook is “based on the assumption of a temporary rather than a prolonged disruption in global trade”.
In the first quarter, strong performance in Asia Pacific helped offset declines in beer sales in both Europe and the Americas, including the U.S. and large beer markets like Brazil and Mexico.
RBC Capital Markets analyst James Edwardes Jones said Heineken’s first quarter was “reassuringly uneventful” in a note.
The report is the last to be presented by van den Brink, who steps down on May 31. Heineken said in January it had initiated a search to appoint his successor.
(Reporting by Emma Rumney; Editing by Christopher Cushing, Kate Mayberry and Barbara Lewis)
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