Heineken NV, the world’s second-largest brewer, reported first-quarter sales that missed estimates as inflationary pressures weakened volumes across Asia, Africa, the Middle East and Eastern Europe.
(Bloomberg) — Heineken NV, the world’s second-largest brewer, reported first-quarter sales that missed estimates as inflationary pressures weakened volumes across Asia, Africa, the Middle East and Eastern Europe.
Beer volumes fell 3% on an organic basis for the quarter ended March, below the average analyst estimate for a 1.04% decline, the maker of Amstel beer said in a statement Wednesday.
The Dutch brewer, which previously forecast declining volumes in Europe for the year, said first-quarter volumes were dragged down by volatile demand in Asia, Africa the Middle East and Africa.
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As higher raw material costs weighed on margins, many brewers have resorted to price increases. That, combined with a cost-of-living squeeze, has presented a particularly challenging environment for the industry.
“We see the economic environment as volatile and uncertain,” Chief Executive Officer Dolf van den Brink said in the statement.
During the quarter, Heineken bought back about €1 billion worth of its shares from Fomento Economico Mexicano SAS, as the Mexican Coca-Cola bottler started to divest its stake in the Dutch group in order to better focus on its Latin American retail operations.
Heineken still expects its outlook for adjusted operating profit to grow organically by mid- to high-single digits this year.
It has also warned of the risk of nationalization of its Russia operations, as a sale of the business is being weighed down by frequently changing regulations in the market.
–With assistance from Andy Hoffman.
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