Heineken NV issued a gloomy earnings report Wednesday, saying first half profit fell 17 percent because of bad weather, weak "consumer sentiment" in Europe and the United States, and slowing growth in developing countries.
Chief executive Jean Francois van Boxmeer said Wednesday the outlook for the second half is similar.
"Although the volume trends have improved in July with the warm summer weather in Europe, economic conditions in several of our core markets continue to constrain consumer spending," he said in a statement.
Net profit at the world's third-largest brewer was 639 million euros ($858 million), down from 766 million euros a year ago. Revenues rose 3 percent to 10.4 billion euros, but that was due to Heineken's takeover of Asian Pacific Breweries, the maker of Tiger beer.
Amsterdam-based Heineken bought the 58 percent stake in APB it didn't already own for 4.8 billion euros in November. Without the whole of APB, first half sales would have fallen by 1 percent, Heineken said. Volumes were down 3 percent, though average selling prices were 2 percent higher.
Shares fell 3.4 percent to 53.63 euros in early Amsterdam trading.
"Heineken's first half performance was slightly weaker than expected, especially on volumes and net profit," said SNS Securities analyst Richard Withagen, in a note on the earnings. "First half beer volumes were down about 7 percent on an organic basis across Europe, as the decrease in Western Europe did not abate much in the second quarter and the decrease in Central and Eastern Europe even accelerated."
Heineken said the U.S. market was hurt by slow economic growth and bad weather. However, it said its Dos Equis, Tecate Light and Strongbow cider brands all grew strongly. Sales volumes of the Heineken brand itself were lower.
Heineken, which is controlled by the family that bears the family name, issues financial reports twice annually, though it also issues trading updates in the first and third quarters.