Heineken Adjusts 2023 Forecast Due to Vietnam's Economic Slowdown
Heineken, the world’s second-largest brewer, has revised its 2023 profit growth forecast due to an economic slowdown in Vietnam, which had a greater impact on first-half earnings than anticipated. The Dutch company, known for brands like Tiger and Sol, now expects operating profit growth before one-offs for this year to range between zero and a mid single-digit percentage, compared to the previous forecast of mid- to high-single-digit percentage growth.
During the first half of the year, Heineken experienced a 5.6% decline in beer sales compared to the previous year. Despite higher prices contributing to increased revenue, the company saw an 8.8% decline in like-for-like operating profit, surpassing the average forecasted decrease of 4.8% from a company-compiled poll.
Heineken attributed its Asia region’s performance to the economic slowdown, particularly in Vietnam, one of its largest markets. Vietnam is facing reduced global demand for its exports, resulting in a 13.2% decrease in beer volumes and even steeper declines in sales of premium beers. Operating profit in the region decreased by approximately one-third.
However, Heineken remains optimistic about a strong turnaround in profit during the second half of the year. The company’s namesake brand, which is Europe’s top-selling beer, is expected to contribute to the overall improvement.