The Dutch brewer Heineken reported on September 12 that its 1H97 net income increased by nearly 10 percent and predicted full-year profit growth to be even higher as newly-consolidated companies, such as the Zlatý Bažant brewery in Slovakia, recorded strong sales volumes and project increased exports.
Overall, Heineken's net profits rose 9.8 percent to 326 million Dutch guilders ($162.5 million), with operating profits up 15 percent at 535 million. Analysts' forecasts for net profit had ranged from 310 million to 323 million guilders.
"The good summer weather in August in parts of Europe had a positive effect on sales volume," according to a statement released by the Amsterdam-based firm. Locally, the Zlatý Bažant plant in Hurbanovo confirmed the parent company's statement by recording booming sales.
"What we can see is that Zlatý Bažant at the moment is growing very rapidly, both in its increased market share and in volume terms," said Marc Bolland, Zlatý Bažant's general director.
"We are registering 30-40 percent higher sales volume than last year," he continued. Bolland credited the sales volume jump to the beer's higher quality and more than 300 million Sk of investments into the brewery's production facilities in the past one and a half years. Heineken supplied majority of the investment capital, Bolland said, while a smaller portion came in the form of credit from international banks.
Bolland would not specify on Zlatý Bažant's market share, but said "it has doubled in the past two years. Zlatý Bažant is again the market leader in Slovakia." The Heineken statement said net income also has been favorably influenced by rising exports. "Exports to the U.S. and other countries are rising," the statement said. "On the basis of these developments, Heineken expects the growth in net profit for the whole of 1997 to be well above 10 percent." Zlatý Bažant had a hand in that, too.
Bolland said the company's exports to the neighboring Czech Republic "had doubled" on sales of "40,000-50,000" hectoliters, and that "demand is even greater" than what the brewery can furnish.
Furthermore, the brewery produces under the Amstel label for central and eastern Europe, supplying Russia, Ukraine, Kazakhstan and Romania. "We've brought [export capacity] here," Bolland said.
The Heineken group, Europe's biggest brewer and world's number two after Anheuser-Busch, said net turnover rose 11 percent to 6.52 billion guilders. Six percent of the growth was accounted for by the newly consolidated companies, while currency effects contributed another three percent.
Sales volume rose three percent, but excluding new consolidations was slightly below the first half of 1996.
"On one hand, the remaining increase in turnover was due to higher selling prices and an improvement in the sales mix in a number of countries. On the other hand, beer sales were lower," Heineken said. The decrease occurred mainly in Europe and Africa.
Reuter's Amsterdam bureau contributed to this report.
9. Oct 1997 at 0:00 | Richard Lewis