Heineken profit up, says brand outperforms market

Dutch brewer Heineken NV first-half operating profit rose 7.4 percent, and it said on Wednesday it had managed to pass on higher costs to most markets apart from the United States, despite weaker economies.
Its shares had gained 3.4 percent to 32.4 euros by 0715 GMT, outperforming the DJ stoxx food and beverages index which was down 0.2 percent, as analysts said the results were broadly in line with or even better than expected.
The world's third-largest brewer said profit before special items was 925 million euros ($1.36 billion) and sales totalled 6.4 billion euros.
It said it expected underlying net profit growth at least in the mid-single digit percentage range for the full year after achieving 5.3 percent growth in the first half, adding volume trends for the first half would continue through the year.
This year's lower forecast reflects weak consumer sentiment and the downturn in many economies.
"We believe that Heineken's (first half) results are not as bad as feared given a strong top line … the outlook for 2008 is very cautious though, but provides room to over deliver," analysts at ING wrote in a research note.
"These results are more or less in line with expectations, although I think the outlook for volumes is somewhat disappointing," said analyst Richard Withagen at SNS Securities.
In 2007, Heineken posted underlying profit growth of 23 percent after guidance for growth of between 20-25 percent.
Heineken Chief Executive Jean-Francois van Boxmeer said: "This is a good first-half performance, demonstrating our competitiveness against a background of weaker economies and increased input costs."
"We have maintained the momentum of our top-line growth and again ensured that the Heineken brand outperforms the market and increases its share of the international premium segment."
Costs rose by 15 percent in the first half of 2008 and the brewer said it expected them to rise by 8 percent next year.