Heineken NV, the world’s third-largest brewer, reported sales growth that missed expectations as demand waned in key regions such as Africa, Russia and the Middle East.
First-half beer volumes on an organic basis rose 4.1 percent, the company said in a statement Monday, less than the 4.3 percent estimate, and revenue growth on the same basis missed analysts’ expectations in all regions save for Europe. The below-par performance offset earnings that came in line with analysts’ estimates. The shares fell 2.9 percent in early Amsterdam trading.
Growth in the period was “modestly disappointing,” Eamonn Ferry, an analyst at Exane BNP Paribas, said in a note.
Heineken has come to rely more on sales outside of its home region amid fierce price competition and ebbing demand in Europe, which accounts for about half of its revenue. Volumes dipped 5.9 percent across Africa, the Middle East and Eastern Europe in the second quarter, hurt by a weakening consumer environment in Russia and Nigeria. Chief Executive Officer Jean-Francois van Boxmeer said cuts to investment and jobs are possible across the broader region if productivity targets are not met.
“While Africa Middle East and Eastern Europe continued to be challenging, performance was strong in some key developing markets such as Vietnam and Mexico,” the CEO said in the statement. He told CNBC that drinkers in Africa will likely choose its less-expensive brews for months to come.
Sales also missed estimates in the Americas, due to a “slight decline” in Brazil and the U.S., the company said. On Friday, Heineken’s rival Anheuser-Busch InBev NV lowered its forecast for revenue from Brazil this year, now expecting it to be little changed from last year.
The brewer also reiterated its forecast for year-on-year profit margin expansion.
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