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Heineken swings back to profit as Covid restrictions ease

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Heineken earnings rebounded in the first half as Covid restrictions eased./AFP
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Aug 03, 2021 - 03:21 AM

THE HAGUE, NETHERLANDS — Heineken returned to profit in the first half of the year as countries lifted Covid restrictions, but the pandemic continues to affect the Dutch brewer in key markets, the company said Monday.

Net profit rose to one billion euros ($1.2 billion) in the first six months of 2021 after the company suffered 297 million euros in losses during the same period last year.

But Heineken, whose roster includes Amstel, Red Stripe and Tiger, said it expects its full-year financial results to remain below pre-pandemic levels.

The company attributed the first half rebound to a “gradual lifting of the significant restrictions implemented last year across most markets to contain the spread of COVID-19”.

The recovery, however, is uneven across the world as new Covid waves and variants have triggered restrictions, particularly in Africa and Asia, Heineken said.

“We are pleased to report a strong set of results for the first half year, whilst the pandemic continues to impact the world and our business,” Heineken chief executive Dolf van den Brink said in a statement.

“Yet there is reason for caution too,” van den Brink said.

Covid continues to have an impact in Asia and Africa, two key regions for the brewer, while rising commodity costs will start affecting Heineken in the second half, he said.

Turnover rose more than eight percent to 10 billion euros in the first half, which was “slightly better” than expected, said Wim Hoste, analyst at KBC Securities.

Heineken was pummelled by the pandemic, causing the company to lay off 8,000 employees — around 10 percent of its workforce.

More than half of the benefit from the job cuts has been realised, “with the bulk of the remainder to be captured by the end of the first quarter of 2022,” Heineken said.

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