Dutch brewing giant Heineken on Monday saw its share price plummet over five percent after revising outlook downwards for the year, despite reporting a leap in first half profits.
The world’s second-largest brewer saw profits jump 9.1 percent to 950 million euros ($1.1 billion) from January to June, while revenue hit 10.8 billion euros, up 4.2 percent from the same period last year, a statement said.
But Heineken revised downwards its outlook for the year as a whole, predicting a 20 basis point fall in operating profit margin for 2018.
Investors in the Amsterdam stock exchange reacted coolly to the news, dragging the company’s share price down nearly 5.8 percent in Monday morning trading.
“Economic conditions are expected to remain volatile and Heineken assumes a negative currency impact comparable to 2017 on revenue and operating profit”, Heineken’s statement said.
“Operating profit margin was lower than last year mainly due to the consolidation of Brasil Kirin, adverse currency effects and higher input costs,” CEO Jean-Francois van Boxmeer said.
Last year Heineken took over Brasil Kirin and Lagunitas in the United States. In February this year, the company opened its seventh brewery in Mexico, pouring 500 million euros into the venture.
In the first half of the year, Heineken saw beer volumes rise 7.5 percent worldwide, driven by double-digit growth in Brazil, South Africa, Russia, Nigeria, Mexico and several European countries.
The group is the world’s second-largest brewer after Belgium-based AB InBev.
Heineken said sales were boosted by Uefa Champions League and Formula 1 sponsorships.
Non-alcoholic Heineken 0.0 beer — now available in 33 countries — also continued to perform well following a 2017 launch.