Heineken alerts market to foreign currency pressure

Beer giant Heineken has warned that adverse currency movement 'continues to weigh on results' amid still 'volatile' foreign exchange markets, and might wipe €50 million (£39.4m) off its full-year profits.

Heineken's offices at Edinburgh's South Gyle business park. Picture: Ian Georgeson

However, group chief executive Jean-Francois van Boxmeer said it had still been a good first trading quarter despite some challenging conditions as the Dutch group reported a first‑quarter net profit of €265m. That compared with €579m in the same quarter last year, but the figure was flattered by a €379m one-off gain from the sale of the group’s Mexican packaging business, Empaque.

Van Boxmeer said Heineken’s volumes grew 7 per cent, while volumes in the premium segment rose 4.8 per cent, supported by “a strong Vietnamese and Chinese New Year period and the earlier timing of Easter”.

He said that the Americas and Europe had seen good volume growth, but Africa, Middle East and Eastern Europe were “challenging”, with tough underlying trading conditions and a weaker consumer environment in Nigeria due to the low global oil price.

Heineken, which employs about 650 in Scotland, said the Russian market also remained under pressure, with volumes down by mid-single digits. Beer volume growth of 8.2 per cent in the Americas was led by continued growth in Mexico, Brazil, the US and Caribbean.

In Asia Pacific, where the group’s volumes lifted 23 per cent, there was double-digit volume growth in Vietnam.