Heineken H1 – 5.3% organic grow

Dutch brewer Heineken NV reported a 34.8% rise in first-half net profit, buoyed by cost cutting, higher sales of premium beers and its acquisition of half of Scottish & Newcastle.

 The world's 3th biggest beer group said
net profit in the six months to June 30 rose to EUR407 million from
EUR302 million a year earlier, while revenue climbed 17.1% to EUR6.41
billion from EUR5.48 billion.

Organic growth was just 5.4%, driven by
higher African volumes, particularly in Nigeria, as well as growth in
Central and Eastern Europe and Asia Pacific. Volumes in Western
Europe and the U.S. were hurt by weakening economies.

Heineken agreed to split
Edinburgh-based Scottish & Newcastle with Danish rival Carlsberg
A/S (CARL-A.KO) in a EUR10.3 billion deal last year. Heineken said
that the integration of new businesses is proceeding rapidly,
although last Friday said weakening economies mean the deal may not
be earnings enhancing in 2009.

Like all brewers, Heineken is faced
with rising input costs, both for the grains used to produce the beer
and for the metals used to package it. Per hectoliter, input costs
rose 15%, Heineken said.

It said it has hedged 100% of its 2008
raw material and packaging needs, and 50% of the total 2009
requirements. It expects a 2009 price increase of approximately 8%
compared to 2008.

It also said the strength of the euro
and financing costs linked to acquisitions weighed on earnings.

The company said it expects at least 5%
organic net profit growth for the whole of 2008. Heineken also said
that it expects the volume trends of the first half to continue in
the second half of the year.