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Heineken Reports 33% Drop

Mar 3, 2005 - 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.

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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.


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