Heineken Reports 33% Drop

Dutch brewer Heineken NV reported a 33 percent drop in 2004 net profit, blaming the weak dollar and the reduced value of its Brazilian subsidiary. It also warned its profit could fall again this year.

The world’s fourth-largest brewer by volume said profit fell to 537 million euros ($701.7 million) in 2004, down from 798 million euros a year earlier. Sales rose 8 percent to 10 billion euros ($13.1 billion) from 9.26 billion euros, while operating profit rose 2 percent to 1.25 billion euros ($1.63 billion).

Heineken said it would invest an extra 100 million euros ($130 million) in “innovation and high-impact, aggressive marketing” in 2005, focusing on the United States and Europe which could lead to a lower profit for 2005.

The rise in sales came “despite the adverse impact of external factors like difficult trading conditions in Western Europe and the United States, and a strong comparison base due to the excellent summer in 2003,” Chief Executive Thony Ruys told a news conference at the company’s headquarters.

“Heineken is premium-positioned in every market in the world, except for the Netherlands,” he said. In its home market Heineken is the largest mass-market beer.

In the United States, sales of Heineken and Amstel Light rose by 5 percent and 2 percent, respectively, “thanks to the introduction of new packaging and successful sponsorships,” the company said.