E-Malt.com News article: 3791

Netherlands, Amsterdam: Shares in Heineken NV moved lower in morning trade (December 6) after the company told analysts it expects the weak dollar to eat into 2005 profits by more than previously forecast. Heineken sees the weak dollar denting net profit by EUR 51 million next year, versus a previous estimate of EUR 35 million, analyst Jan-Kees Mons at Cheuvreux said. The negative effect on operating profit has been raised to EUR 79 million from EUR 54 million, according to AFX News.

The company has 57 pct of the expected US$ 800 million in cash inflow next year already hedged, with an implied rate of 1.33 usd to the euro, the analyst said.

Estimates for 2004 were also adjusted slightly, with the brewer now expecting the negative currency impact to be EUR 83 million at the net level and EUR 127 million on operating profit. Heineken's current guidance is for lower net profit this year, as negative currency effects outweigh organic growth and contributions from acquisitions.

A spokeswoman for Heineken was not able to immediately confirm the new currency effect estimates.

The analyst said the new estimates reduce 2005 earnings per share by 0.03 eur. Given that part of its dollar exposure is not yet hedged, the new estimates from Heineken should come as "no surprise", the broker said.

Cheuvreux repeated a 'underperform' rating on the shares. While the stock is below an estimated fair value of EUR 29, they see few triggers in the short-term for price gains and believe the discount to rival InBev is justified given the lower growth prospects of the Dutch brewer. At 11.46 am, December 6, the shares were down 1.6 pct to EUR 23.74 while AEX slipped 0.46 pct to EUR 341.90.


08 December, 2004