E-Malt.com News article: 3440

Netherlands: Heineken NV has lowered its forecast for growth in US imports this year to 3.5-4 percent from a previous outlook of 5 percent. The reduced forecast was given at a roadshow in New York for investors, AFX News Limited posted on October 08. Frans van der Minne, CEO of Heineken USA, said the brewer suffered from weak summer sales, which were hurt by the bad weather in Florida, as well as tough competition from wine and spirits. Florida is the company's second-largest state market in the US, he said.

He said the 5 percent forecast growth rate would likely be "stretched" and growth would be closer to 3.5-4 percent. The company's shares fell sharply following the news. At 3.55 pm, the shares lost 1.8 percent to 24.95 eur after earlier touching a low of 24.51. The AEX index traded 0.7 percent lower at 335.21.

The total US beer industry shrunk during July and August by 2.5 percent, while the import specialty segment was down close to 5 percent, Van der Minne said. Meanwhile, wine and spirits grew by 4 percent and 6 percent respectively.

He added however that, based on preliminary figures, growth returned to the beer market in September, which was a "pretty good month for the whole industry and especially for Heineken USA".

The company reiterated during the presentation its outlook for 2004 for growth in organic net profit. However, negative currency effects will outweigh the organic growth and contributions from acquisitions leading to a lower overall net profit.

The brewer also said it will conduct an impairment test on its 20 percent stake in the Brazilian brewer Kaiser during the second half of the year.

Based on the current depreciation in the real versus the euro, the non-cash impairment charge would be 85 mln eur, the company said. The stake is valued currently at 190 mln eur.

On the central European brewer BBAG acquired last year, the company said that the integration is going according to plan. Gross synergies for 2004 are expected to reach 25 mln eur, with 10 mln eur in restructuring costs. The brewer is on track for synergies of 80 mln eur in 2007.


12 October, 2004