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Heineken has raised profits guidance for 2024 despite poor weather in Europe and currency challenges as volumes increased in the first half.
Net revenues increased 6% to €14.8bn in the six months to June, mainly driven by growth of the Dutch brewer’s largest operating companies Nigeria, Mexico, Brazil, Vietnam and India.
Beer volumes for the half rose 2.1% year on year, with all regions contributing. However, growth slowed in the second quarter because of the timing of Easter and a damp June in Europe.
Its premium volumes increased 5.1%, with the Heinekn brand up 9.2%.
Operating profits in the half were up 12.5% to €1.5bn.
CEO Dolf van den Brink said the “solid” first half gave the group the confidence to update full-year operating profit outlook to the range of 4% to 8%, up from low to high-single-digit percentage growth.
Heineken registered cost savings of more than €300m in the half and added it expected to hit its ambition for €500m in 2024.
The group plans to reinvest a large proportion of the savings into marketing and sales.
But it warned consumer confidence and economic sentiment in developed markets remained below their historical average and there was also a risk of material currency devaluation in Ethiopia and hyperinflation in Nigeria and Egypt.
Shares in Heineken slumped 7.2% to €84.28 this morning as the results cames in behind analyst expectations.
Morning update
Robust demand and keener pricing helped Cranswick deliver a strong first quarter to its new financial year.
Group reported revenue in the 13 weeks to 29 June increased 6.7% year in year, driven by strong volume growth on the back of business wins and a return to promotional activity.
Premium product ranges performed “particularly well”, the pork and poultry processor said in a trading update.
Easing input costs were also reflected in selling prices.
Export sales volumes were strongly ahead but were offset by reduced pricing in the Far East and EU.
CEO Adam Couch said: “We have made a strong start to the year, delivering another quarter of strong revenue growth, whilst continuing to provide excellent service levels ensuring full availability of our products for our customers and the UK consumer.”
He added: “Looking ahead we continue to lay the foundations which will allow Cranswick to prosper. We have added to our pig herd during the quarter and, going forward, we expect to make further investment in our agricultural operations to ensure supply chain security and value optimisation. We expect demand for our products to remain robust through the remainder of this year and our outlook for the current year remains unchanged.”
The FTSE 100 bounced 0.7% higher to 8,339.48pts this morning.
Shares in Cranswick reacted well to the trading update, rising 2% to 4,629.2p as markets opened.
Reckitt Benckiser crashed 8.4% to 4,108.7p as it took a whack from a decision by a US jury to award damages of $495m in a case against Abbott, a rival maker of infant formula.
This week in the City
It’s looking like a busy week on the markets despite the summer holidays moving into August.
Diageo full-year results, Greggs interims and a AG Barr Q2 trading update are all due out tomorrow, with the latest BRC-NielsenIQ shop price index for July.
Just Eat Takeaway interims are due on Wednesday.
Consumer health group Haleon posts half-year results. AB InBev reports second quarter results and Pets at Home will update the market on its first quarter figures on Thursday, with high-street bellwether Next to issue a Q2 update, while Amazon is to publish quarterly figures in the evening.
The latest decision on interest rates by the Bank of England is also scheduled for Thursday.
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