In this photo illustration, bottles of Heineken beer are displayed on July 31, 2023 in San Anselmo, California.
Justin Sullivan | Getty Images
Heineken shares opened nearly 7% lower on Monday, after the brewing giant’s first-half profit growth came in weaker than analysts had expected.
The company’s stock was trading down 6.5% at 8:40 a.m. London time.
Operating profit showed organic growth of 12.5%, below a company-compiled consensus forecast of 13.2%.
Beer sales, which were expected to grow at 3.4%, rose by just 2.1%.
Heineken tumbled to a net loss of 95 million euro ($103 million), primarily on the back of a non-cash impairment over its 874 million euro investment in Chinese brewing firm CR Beer. Heineken said the write-down was the result of the decline in CR Beer’s share price amid concerns about consumer demand in China, rather than over the Chinese company’s operational performance.
In an update that had been keenly-awaited by analysts, Heineken revised its operating profit organic growth forecast for the year to a range between 4% to 8%. The company’s guidance had pointed to low to high single-digit growth previously.
“Heineken gathered momentum following optimistic comments at a recent conference leading the market (and ourselves) to improve estimates,” Barclays analysts said in a Monday note.
“However, these results missed forecasts, suggesting there was a gap between the company’s messaging and analyst expectations. This needs to close.”
The major miss was in Europe, which saw just 0.2% profit growth versus an expectation of 15.1%, largely because of increased promotional spending in a competitive market, Barclays said.
