NETHERLANDS – Heineken has recorded 5.37% increase in revenue to US$27.4 billion and a 7.1% rise in profits to US$2.75 billion in its 2017 full year financial report.
The company attributed its overall growth to various new ventures it undertook in key developing markets and numerous expansions in 2017.
Heineken expanded its production capacity in Mexico, Cambodia, Vietnam, Ethiopia, Haiti and has eyed the African continent indicated by the opening of a new brewery in Ivory Coast and construction of a new brewery in Mozambique.
The beer volumes grew by 3% with Heineken beer brand recording 4.5% per hectolitre.
Beer revenue per hectolitre recorded an improved growth in all regions except for Asia Pacific.
“We delivered strong results in 2017, with all regions contributing to organic growth in volume, revenue and Operating Profit,” said Jean-Francois van Boxmeer, chief executive officer, Heineken NV.
According to the company, Africa, Middle East & Eastern Europe region contributed greatly to its organic volume growth of 4.8%, with strong growth coming in the second half from Ethiopia, South Africa, Russia and Ivory Coast.
However, Nigeria, the Democratic Republic of Congo (DRC) and Egypt recorded weaker volumes as the consumer demand declined due to lingering recession.
In Nigeria, DRC and Egypt, Heineken lost US$710.9 million off the company’s revenue and US$145.4 million off operating profits.
Beer volume in Nigeria dropped greatly though the second half of the financial year recorded a slight improvement in the trends as valued brands continued to perform better than the rest of the brands.
The company linked the drop to low consumer confidence, weak consumer spending and dwindling purchasing powers as a result of defaulting on payment of wages to workers and the given macroeconomic challenges in the country.
South Africa formed a key market in the beer industry showing good performance and improved volumes in its brands that is, Heineken, Amstel, Sol and Windhoek.
Other markets in Africa that saw good performance was Ethiopia, recording double-digit volume increase while Egypt declined double-digit as a result off increase in VAT and devaluation of Egyptian pound in 2017.
DRC also recorded a decline in beer volumes due to recent price increase taken to mitigate rising input costs following the currency devaluation.
Overall growth was realised through organic volume growth, valued at 5%.
The Asia Pacific region and America recorded organic volume growth with Asia realising the highest volume of 8.9%, driven by double-digit gains in Vietnam, and Cambodia, which offset declines in China and Indonesia.
European beer volumes almost remained unchanged at 0.2%, ascribed to positive performances in Italy, France, Spain and Portugal, with help from On-premise channel.
According to Van Boxmeer, they were awaiting eagerly to great performance in 2018 with an expected expansion of around 25 basis points of its operating profit margin.
He said that they’ll ensure this by barring any unforeseen macro-economic and political developments.