Heineken shrugs off ‘volatile’ trading backdrop to drive up interim earnings

● Europe one of the star turns as brewer also benefits from zero alcohol product

Heineken rode out “volatile” trading conditions to boost halftime profits, including turnarounds from weak first quarters in Africa and the Americas, the Dutch brewing major revealed yesterday.

The group, which took over the former Edinburgh-based Scottish & Newcastle in 2008 as part of a carve-up with Carlsberg of Denmark of the Scottish brewer, saw half-year operating profit climb 6 per cent to €1.8 billion (£1.6bn)

Beer volumes, which also include the Sol, Amstel and Tiger brands, rose 2.6 per cent, with growth across all regions.

Revenues rose 3.8 per cent to €10.5bn, while net profits at the group were 6 per cent higher at €1bn against €977 million in the first six months of 2016.

Jean-francois van Boxmeer, chairman and chief executive of Heineken, the world’s second largest brewer, said: “We delivered strong results in the first half-year, with all four regions contributing positively to organic growth in volume, revenue and operating profit.

“Europe delivered a good performance, momentum remained strong in Americas and Asia Pacific, and results improved in Africa Middle East & Eastern Europe despite continued difficult market conditions.”

Profits in the European business, including the UK, jumped 16 per cent to €665m from €581m in the same period of 2016.

Heineken 0.0, a new zeroalcohol beer, proved a bright spot for the business as strong demand in Spain, Netherlands, Poland and Austria underpinned double-digit growth in its low and nonalcohol beers across Europe.

Total beer volumes in Europe lifted 1.9 per cent, while Asia Pacific increased 6.3 per cent and the Americas lifted 2.8 per cent. Africa, Middle East and Eastern Europe, a tougher market for the company, saw voumes up 1.5 per cent.

Volumes for the flagship eponymous Heineken brand grew just under 4 per cent worldwide, with “positive momentum” in all regions apart from Asia Pacific where lower volume in China and Vietnam pushed volumes down 7 per cent. The results span six months of deal-making for the firm, which secured beer brands Brasil Kirin and Lagunitas.

Heineken UK also said in June that it would offload pubs in more than 30 areas of the UK to help its £403m acquisition of about 1,900 pubs from Punch Taverns satisfy regulatory concerns. Heineken UK, which already owns some 1,000 tenanted pubs through its Star Pubs & Bars chain, employs 650 in Scotland, chiefly in Edinburgh.