Heineken NV has recorded a net profit of €168 million for the first quarter of 2021.
Better Than Expected
The world's second-largest brewer fared better than expected at the start of 2021 as increased beer sales in Africa and Asia offset a sharp decline in Europe.
The maker of Europe's top-selling lager, Heineken, and Tiger and Sol, retained its outlook that the impact of the COVID-19 pandemic is significant and markets should gradually improve in the second half of 2021, depending on vaccine rollouts.
Volume Of Beer Sold
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The Dutch brewer sold 50.3 million hectolitres of beer in the first quarter, unchanged from a year earlier on a like-for-like basis. The average forecast in a company-compiled poll was for a 5% decline.
Africa, Middle East And Eastern Europe Sales
Sales in Africa, the Middle East and eastern Europe jumped 9.9%, with particularly strong performances in Nigeria and South Africa. Growth in the former was held back by supply constraints, while there was expansion in the latter despite alcohol bans in January and over the Easter weekend.
Asian sales were 5.4% higher, principally in south-east Asia and including Vietnam, which is one of the company's largest markets.
Sales in the region did grow in the first quarter of 2020, although they collapsed in March as COVID-19 spread.
Europe Beer Sales
In Europe, beer sales fell by 9.7% as lockdowns cut drinking in cafés and restaurants by two-thirds.
Sales From Stores And Higher Cost Of Packaging
Growth in sales from stores has not made up for the shortfall. Brewers have also suffered from the higher cost of packaging in single-use cans, rather than cheaper returnable bottles or kegs.
The first quarter net profit of €168 million was nearly 80% higher than a year earlier, but more than 40% lower than the 2019 figure, with European weakness being offset by other regions and cost controls helping.
Plan To Restore Profit Margins To Pre-Pandemic Levels And Job Cuts
The brewer has launched a three year plan to restore profit margins to pre-pandemic levels, partly through cutting 8,000 jobs.
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