Heineken NV Reports 26-Percent Rise in Profit for 1st Half; Strong Sales in the Americas

AMSTERDAM, Netherlands (AP) -- Dutch brewing company Heineken NV reported a 26 percent rise in first-half profit Wednesday, with strong sales in the Americas and a surge in beer drinking in Europe during the soccer World Cup. It also raised its earnings growth foreecast for the full year.
Net profit came to 433 million euros ($557 million) in the January-June period from 345 million euros a year ago. Sales rose 11.6 percent to 5.74 billion euros ($7.38 billion) from 5.14 billion euros.

"At the heart of our improved performance has been the acceleration of top-line growth," said Chief Executive Jean Francois van Boxmeer.

Heineken said the sales increase reflected a 4.7 percent rise in volume, 1.6 percent from higher prices, 3.3 percent from new acquisitions and 2.0 percent from currency effects.

Heineken, which reports earnings twice annually, said it had raised its full-year forecast for profit increase from "the mid-single digit" range to "slightly above 10 percent," but added that the second half of 2006 would suffer by comparison with the strong second half of 2005.

Shares in Heineken, the world's fourth-largest brewer after InBev SA, Anheuser-Busch Cos. Inc. and SABMiller PLC, fell 1.9 percent to close at 36.16 euros ($46.41) in Amsterdam trading.

ING Wholesale Banking analyst Gerard Rijk said the results were "strong," with sales and operating profit better than expected.

The company said it performed especially well in the United States.

"Overall beer market conditions in the USA improved only slightly, but import and specialty beers performed strongly," Heineken said.

Sales were up 20 percent, aided by popularity of mini-kegs and the "halo effect" of the introduction of Heineken Light beer. Heineken also noted that sales volumes of the Dos Equis brand, which it owns, were up 27 percent.

In Western Europe, Heineken said the impact from the World Cup was most noticeable in host nation Germany, with increases in the Netherlands, France, Britain and Spain.

The company reported noteworthy sales increases in nearly all corners of the globe, including Russia and Poland; Chile and Argentina, South Africa and several Central African nations "due to improving political and economic conditions," and in China, Taiwan, Indonesia and Australia.

Exceptions were in World Cup winner Italy, which suffered from an economic decline, and war-torn Lebanon.

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