Dutch brewer Heineken NV (HINKY.PK) Wednesday reported a significant increase in profit for the first half of the year, including gain from sale of stake in a brewery. The company further increased its expectation for input costs.
Profit attributable to equityholders of the company rose to 783 million euros or $975.6 million from 605 million euros. Earnings per share increased to 1.36 euros from 1.02 euros.
The latest results included a post-tax book gain of 131 million euros for the sale of a minority stake in a brewery in the Dominican Republic.
Before exceptional items and amortisation of brands and customer relationships, or beia, net profit increased 1.6 percent, but declined 4 percent on an organic basis. According to the firm, profitability was impacted by difficult trading conditions across Europe as well as higher input costs and planned capability investments.
Input costs increased 6.9 percent on a per hectolitre basis, exceeding slightly the earlier full-year expectations of 6 percent due to faster growth of countries with higher input cost inflation and a shift towards higher priced one-way packaging. The brewer now expects these costs to increase by 8 percent for 2012.
Revenue increased 5 percent to 8.778 billion euros from 8.358 billion euros. Revenue rose 4.5 percent organically, driven by higher total consolidated volumes of 1.6 percent and revenue per hectolitre growth of 2.9 percent. Group beer volume rose 3.3 percent with increases in four of the five regions.
The Heineken brand performed well in the international premium segment with organic volume growth of 6 percent.
The company announced an interim dividend of 0.33 euros per share, an increase of 10 percent from last year.
For the full year, net profit beia is expected to be broadly in line with last year, on an organic basis. The impact of consolidation and foreign currency movements is expected benefit it by around 50 million euros.
The company continues to expect group revenues to benefit from positive momentum in higher growth economies across the Asia Pacific, Africa & the Middle East and the Americas regions. Volume in Western Europe is expected to remain subdued in the second half owing to the challenging economic conditions.
Earlier this week, the Dutch brewer had agreed to acquire its joint venture partner Fraser & Neave Ltd.'s stake that it does not already own in Singapore-based Asia Pacific Breweries Ltd. for a total consideration of S$5.4 billion.
The stock is falling 2.87 percent to 43.23 euros in early morning trade.
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