Heineken and Carlsberg forecast profit increases

Heineken and Carlsberg, the world’s third- and fourth- largest brewers, yesterday forecast higher profits this year as rising consumption in Vietnam and south-east Asia offsets weaker demand from Russia and Africa.

Heineken and Carlsberg forecast profit increases

Sales and profit will both increase in 2016 even with an “increasingly challenging external environment,” said Heineken.

Carlsberg said operating profit will rise by a low single-digit percentage on an organic basis as the brewer reported fourth-quarter earnings that beat analysts’ estimates.

The reports provide a boost for an industry struggling to contend with slowdowns in oil-producing countries such as Russia and Nigeria, along with a weakening economy in China.

Brewers are looking to other Asian markets such as Vietnam to pick up the slack.

“Vietnam is a market that Heineken points out as growing, I would expect the same thing for Carlsberg,” Javier Gonzalez Lastra, an analyst at Berenberg, said.

Heineken and Carlsberg have divided Vietnam between themselves, drawing revenue from the north and south, respectively.

The south is urbanising slower than the north and encountered flooding in the fourth quarter that dented Carlsberg’s sales.

In India, the Danish firm’s 42% volume growth last year could be sustained in 2016, he said.

Meanwhile, Heineken last year boosted its share of the Irish drinks market by 0.3% and grew its share of the cider sector by over 4% to 5.4%.

Heineken Ireland managing director Maggie Timoney, said: “2015 saw Heineken Ireland record market share growth of 0.3% in the beer and cider category, performing ahead of the market and delivering another strong year for the company.”

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