Beer maker Heineken has reported declines in volumes in Nigeria and South Africa in its third-quarter report and projections for 2024.
The company noted it made more money in the third quarter of the year due to higher prices although demand slowed in many markets as inflation bites.
In a statement from the CEO, Dolf van den Brink he said declines in volume from Nigeria and South Africa affected its output for Africa, the Middle East and Europe.
- The CEO’s statement reads, “We returned to volume growth in the Americas, with strong performances in Brazil and Mexico. Asia Pacific improved sequentially, despite ongoing challenges in Vietnam. The Africa, Middle East & Eastern Europe region was impacted by volume declines in Nigeria and South Africa.”
Heineken Nigeria third quarter report
The company noted in its report that inflation and devaluation of the currency resulted in net revenue growing by a low single digit. For the third quarter, non-alcoholic Maltina continued to outperform in the market.
- It said, “In Nigeria, net revenue (beia) grew organically by a low-single-digit, driven by pricing to partially mitigate significant inflation and currency devaluation. Total volume declined in the twenties, behind the market.”
- “Consumers’ purchasing power continued to be under severe pressure due to inflation and the impact of structural economic reforms, affecting our premium portfolio disproportionately. In this challenging context, the leading non-alcoholic malt proposition Maltina continued to significantly outperform the market and broadly held volume.”
Global demand trend
Heineken reported a 4.2% decrease in beer volumes during the July-September quarter on a like-for-like basis, with declines noted in all regions except the Americas.
However, the company achieved a 4.5% increase in net revenue before one-time items.
These results aligned with market expectations, as analysts participating in a company-compiled survey had anticipated a 4.3% drop in volumes and a 4.8% uptick in revenue.
Heineken reaffirmed its previous projection for 2023, expecting operating profit growth to range from zero to a mid-single-digit percentage increase.
Revenue for the quarter
Although there was a global decline in volume, the company’s revenue for the quarter grew by 4.5% to €9.6 billion.
It further noted that currency devaluation in African countries impacted revenues by €397 million but a strong Mexican Peso made up for some of the losses.
- It stated, “Currency translation impacted revenue by €397 million (YTD: €488 million), mainly from the devaluation of currencies in Africa and partially offset by a stronger Mexican Peso. Consolidation effects contributed €276 million (YTD: €507 million) mainly from the integration of Distell and Namibian Breweries.”
