Heineken’s half-year results have shown 12.5% profit, falling short of estimates, with a $948 million China resources impairment charge.

Dutch brewer Heineken announced a 12.5% increase in half-year operating profit on Monday, falling short of analyst expectations and causing its shares to drop 7%.

Despite a disappointing performance, the company raised its full-year guidance, citing solid first-half results and plans to increase investments.

Despite the mixed results, Heineken’s executives expressed confidence in the company’s solid first-half performance and planed to step up investments.

This confidence led to an increase in full-year profit guidance, with the company now expecting organic operating profit growth of between 4% and 8% in 2024.

However, this guidance remained below analyst expectations of 8.2% growth, and some investors may be disappointed by the ongoing caution in Heineken’s forecast.

Bernstein analyst Trevor Stirling noted that there was “food for bulls and bears” in Heineken’s results, citing progress on margins but also the company’s cautious outlook.

One of the major factors impacting Heineken’s results was an €874 million ($948 million) impairment related to its Chinese partner China Resources Beer.

This write-down prompted a net loss for the company, although CFO Harold van den Broek emphasised that the impairment was solely due to a decline in the business’ share price and that the partnership was otherwise performing well.

Overall, Heineken’s half-year results presented a mixed picture. While the company’s operating profit increased, its performance was impacted by external factors and its guidance remained cautious.

Source: Arise News