By Emma Rumney LONDON, April 23 (Reuters) - Dutch brewer Heineken on Thursday reported a 2.8% rise in first-quarter organic net revenue, ahead of analyst expectations for 2.3% rise. (Reporting by Emma
Energy costs, inflation could sap beer sales, Heineken says
Heineken Faces Challenges Amid Rising Costs and Global Uncertainty
By Emma Rumney
LONDON, April 23 (Reuters) - The world's No. 2 brewer Heineken said on Thursday energy costs and inflation - driven up by the war in Iran - could hit demand for its beers, though its first-quarter revenue and volumes beat forecasts.
Sustained cost-of-living pressures, shifts in drinking habits and U.S. tariffs already meant the maker of Tiger and Sol as well as its namesake lager, expected a difficult year.
Impact of Global Conflicts and Economic Pressures
Now, the conflict that began with U.S. and Israeli airstrikes at the end of February has increased the cost of energy needed for production and further dented consumer spending power.
Heineken's shares fell by almost 3% in early trade. Analysts said its warning on beer demand, a poorer-than-anticipated performance in the Americas, home to major beer markets Mexico and Brazil, and the absence of any update on the search for a new CEO were all negatives.
Leadership Uncertainty
Heineken is searching for a CEO after Dolf van den Brink unexpectedly resigned in January. Its results statement made no mention of its efforts to replace him.
Financial Performance and Regional Trends
Rise in First-Quarter Organic Net Revenue
RISE IN FIRST-QUARTER ORGANIC NET REVENUE
The company, which is the biggest brewer after Anheuser-Busch InBev, reported a 2.8% rise in first-quarter organic net revenue, ahead of analyst expectations for a 2.3% rise. Total volumes, which analysts had forecast to be flat, were up 1.2% organically.
Regional Performance Highlights
Strong performance in Asia Pacific helped to offset declines in beer sales in Europe and the Americas, where beer demand has been sapped by factors such as bad weather and U.S. immigration policies that have hit workers sending remittances home.
Heineken said it lagged the market in Mexico during the period and was hit by a shorter carnival season in Brazil.
Outlook and Industry Context
"Global trade has become more complex and volatile, with impacts on energy availability and costs in certain markets. This leads to inflationary pressures, which might affect consumer sentiment in the medium-term," van den Brink said, without mentioning the Middle Eastern conflict directly.
The report is the last he will present before he steps down on May 31. Heineken said in January it had initiated a search to appoint his successor.
Competitor Updates
Anheuser-Busch InBev reports its results on May 5.
(Reporting by Emma Rumney; Editing by Christopher Cushing, Kate Mayberry and Barbara Lewis)
