Heineken profit beats expectations on strong Europe

By Philip Blenkinsop

BRUSSELS (Reuters) - Heineken, the world's second-largest beer maker, reported higher than expected earnings in the first half of 2017, with the strongest profit growth in Europe thanks to a late Easter and an early start of warm summer weather.

The Dutch brewer of Europe's top-selling lager Heineken, as well as Tiger and Sol, said volumes, revenue and profits grew on a like-for-like basis in all four of its regions, with turnarounds from weak first quarters in Africa and the Americas.

Volume growth in Ethiopia and South Africa more than offset a decline in Nigeria while a strong Mexican market ensured expanding sales in the Americas, with declines in Brazil, Panama and to a lesser extent the United States.

Vietnam, one of Heineken's top two markets, continued strong. In Europe, where profit growth was strongest, volumes increased in France, Italy, Spain and Portugal, helped by a late Easter and the warm drink-inducing weather.

The company said on Monday that it continued to expect revenue and profit growth this year.

"Whilst economic conditions are likely to remain volatile, our expectations for the full year are unchanged," Jean-Francois van Boxmeer said in a statement.

It stuck to its target of a 0.4 percentage point improvement in operating margin per year, albeit excluding its acquisitions of the Brazilian business of Japan's Kirin and U.S. craft brewer Lagunitas and its planned purchase of most of the pubs of Britain's Punch Taverns.

However, the company said that its Brazil takeover, consolidated from June 1, would be margin dilutive by 0.4 percentage points this year.

The brewer said its first-half operating profit rose 11.8 percent before one-offs to 1.81 billion euros ($2.12 billion), above the 1.76 billion euro average expected in a Reuters poll of seven analysts.

Heineken ranks as the world's number two brewer, although the gap between it global leader AB InBev has widened after the latter's near $100 billion takeover of SABMiller late last year.

(Reporting by Philip Blenkinsop; editing by Robert-Jan Bartunek)