Heineken H1 Profit Rises

World's third-largest brewer said Wednesday its first-half net profit rose by 42 percent thanks to one-time financial gains, cost cutting and positive currency effects.

AMSTERDAM (AP) -- Heineken NV, the world's third-largest brewer, said Wednesday its first-half net profit rose by 42 percent thanks to one-time financial gains, cost cutting and positive currency effects.

The maker of Amstel and Dos Equis said net profit was €695 million ($881 million), up from €489 million in the same period a year earlier. This year's figures include a net €121 million in exceptional gains, mostly due to the sale of Heineken's 68.5 percent stake in an Indonesian subsidiary to Asia Pacific Breweries for €157 million.

Revenue rose 5.2 percent to €7.52 billion, mostly due to its $7.8 billion acquisition in April of Mexico's Femsa, which includes brands such as Dos Equis, Tecate and Sol. Heineken said revenues would have fallen 2 percent on an "organic" basis, which strips out the impact of acquisitions and a weak euro.

On the same basis, volumes fell 3.9 percent while prices rose 1.9 percent.

"Trading conditions remained challenging in Europe and the USA, but we realized strong group beer volume growth in Africa and Asia," Chief Executive Jean-Francois van Boxmeer said in a statement.

Heineken, which doesn't break out quarterly earnings, said it had saved €104 million in operating costs in the first half, in part due to consolidating production and cutting purchasing costs.

Shares rose 2.0 percent to €35.45 in Amsterdam.

Analyst Richard Withagen of SNS Securities said the company's cost savings in particular were better than expected.

"Europe remains the difficult region, as expected, and earnings came in below expectations despite a strong contribution from cost savings," he said in a note.

"On the positive side, earnings in the Americas and top line growth in Africa/Middle East were stronger than expected."

He repeated a Hold rating on shares.

Heineken said it "remains cautious on the development of beer consumption in Europe and the USA due to continued weak consumer spending and planned austerity measures across many countries."

In Western Europe, the largest of Heineken's markets, operating profits grew 14 percent to €341 million. In Britain, Heineken's ownership of Scottish & Newcastle makes it the largest operator.

Heineken attributed improvements in Britain to "better pricing and significant cost reductions," having closed two breweries.

In the U.S., Heineken said it outperformed, with volumes down 1.7 percent versus a 3 percent fall in the overall market due to "high unemployment and weak consumer confidence."

Dos Equis and Newcastle Brown volumes grew, while Heineken and Amstel declined. Operating profit in the Americas as a whole rose sharply to €223 million due to the Femsa buy.

In Africa, which has passed the Americas as Heineken's second most important region by profit, volumes rose in Nigeria, South Africa and Egypt. Operating profit was up 5.4 percent to €273 million.

Heineken had €9.17 billion in net debt at the end of June.