Dutch brewer Heineken reported a 12.5% rise in half-year operating profit on Monday. However, this was below analysts’ forecast of 13.2%. The rise in half-year operating profit was attributed to a boost from sporting events in June and July that did not materialize, causing its shares to decline by 7%. The company also announced an 874-million euro ($948 million) impairment related to its Chinese partner, China Resources Beer, which disappointed investors.
Despite this, Heineken raised its full-year guidance as expected. In addition, the first-half revenue and volumes came in slightly below expectations. Heineken, the world’s second-largest brewer, with brands including Tiger and Sol, is facing challenges in its partnership with China Resources Beer. The company took an 874-million euro ($948 million) impairment related to this partnership. Although company executives stated that the first-half performance was solid and expressed plans to increase investments, the new guidance of between 4% and 8% in organic operating profit growth for 2024 disappointed investors. This update remains below the 8.2% growth that analysts currently expect. Chief Financial Officer Harold van den Broek attributed the weak June and July performance in Europe to poor weather and the lack of a boost from sporting events.
Heineken wrote down the value of its 40% stake in China Resources Beer, resulting in a net loss. However, van den Broek clarified that this was only due to a decline in the business’ share price, and otherwise, it was performing well.