Heineken doubles profit, but warns of rising costs

Bottles of Heineken NV lager are displayed for sale in the ‘beers, wines & spirits’ aisle of a supermarket in Slough, U.K.

Simon Dawson | Bloomberg | Getty Images

Heineken, the world’s second-largest brewer, reported first-half earnings above expectations on Monday, but warned of weakness in the rest of the year as costs eat into margins and the COVID-19 pandemic continues to hit key markets.

The maker of Europe’s top-selling lager Heineken, Tiger and Sol, said operating profit before one-offs doubled to 1.63 billion euros ($1.93 billion), compared with the average forecast in a company-compiled poll of 1.22 billion euros.

Dolf van den Brink, who has been chief executive for a year, said the company was pleased with a strong set of first-half results, but said there was reason for caution, with results expected to remain below pre-pandemic levels in 2021 as a whole.

COVID-19 would remain a factor, with the biggest impact in key markets in Africa and Asia. Rising commodity costs would also start affecting Heineken in the second half of 2021 and would have a “material effect” in 2022.

Heineken previously forecast that market conditions should improve in the second half of 2021, depending on vaccine roll-outs.

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