Shares in Heineken fell sharply on Wednesday after the Dutch brewer missed profit forecasts for the first half and warned that faltering consumer sentiment clouded the outlook for the rest of the year.
Headline net profit fell 11 per cent to €605m, largely due to challenging comparative figures from the previous year, when it booked an exceptional gain in the period. The company warned that poor weather was already hitting beer sales in Europe and the United States. The downgraded forecast means that full-year profit before exceptional items and goodwill, Heineken’s favoured metric, will be flat for 2011, at €1.45bn ($2.09bn), compared to the €1.68bn expected by analysts.
“Heineken maintains that its performance is ‘solid’ and that its strategy of ‘transforming our geographic footprint’ remains on track. Heineken launched in Mexico in March and will brew locally in India from August and the group will continue its ‘relentless focus on tight cost management’,” said Mark Brumby, leisure analyst at Langton Capital.
The shares slid 7.6 per cent to €33.44.
Overall, European shares rose on Wednesday, extending a three-day rally as hopes grew that the Federal Reserve would announce another round of quantitative easing. The FTSE Eurofirst 300 index rose 1.4 per cent to 936.79.
Cameron Peacock at IG Markets said: “There still seems to be this thought that Europe and the US are wrapped up in a relief rally, topped by the expectation that something good will be unveiled at the Fed’s Jackson Hole summit later in the week.”
Belgian insurance group Ageas led the risers, surging 21.3 per cent to €1.33, saying it would buy back as much as €250m-worth of shares. The company’s net loss in the first half was also smaller than the €115m forecast, coming in at €58.8m.
Holcim advanced 5 per cent to SFr46.55, amid a general rise in Swiss stocks. Shares in the cement maker were lifted from “neutral” to “outperform” by Credit Suisse. Broker Kepler Equities raised its recommendation on Swiss Re from “reduce “ to “hold”, prompting shares in the reinsurer to move up 3.6 per cent to SFr40.30.
The prospect of a levy by the Italian government on sectors including toll motorway operators and telecommunications companies, detailed in reports carried by the Finanza e Mercati newspaper, cast a shadow over the Milan bourse. Toll road operator Atlantia fell 3.4 per cent to €10.35 and shares in Telecom Italia fell 0.7 per cent to €0.82.