Heineken has given a warning over rising commodity costs as it posted better first-half results than expected.
The world’s second-largest brewer said that it expected the Covid-19 pandemic to weigh on key Asian markets for the rest of the year and rising costs to dent margins.
Dolf van den Brink, chief executive, said the Dutch company was pleased with the strong first half, as operating profit before one-offs doubled to €1.63 billion, compared with the average analyst forecasts of €1.22 billion.
However, Van den Brink expressed caution, with results expected to remain below pre-pandemic levels over the whole year.
“Unlike last year, we now see significant impact [from the pandemic] on the business in southeast Asia,” he told Reuters. He said Vietnam, a top three market, was a concern, with lockdowns imposed in its strongholds, while the company’s Malaysia brewery is shut and reduced tourism has hit Indonesian sales.
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The maker of Europe’s eponymous top-selling lager had previously forecast an improvement in market conditions in the second half of this year.
Rising commodity costs, including for barley, sugar and aluminium for cans, would start affecting Heineken in the second half of the year and would have a “material effect” next year, when hedging contracts were no longer mitigating the increases, the group said.
Heineken sold almost 10 per cent more beer in the first half than a year ago and Van den Brink said the company would seek to be assertive on pricing, having achieved 10 per cent higher prices in the Americas and Africa and the Middle East in the first half.
