Dutch brewing giant Heineken has reported a net loss of €48 million for the second quarter of 2023, a stark contrast to the €589 million profit recorded in the same period last year. The company's revenue, however, saw a modest increase of 2.2%, reaching €17.8 billion.
The primary culprit behind the substantial loss is a massive €874 million write-off related to Heineken's 20% stake in China Resources Beer (CR Beer), China's largest brewing company. CR Beer's shares have plummeted by more than 30% since the beginning of the year, largely due to declining demand in the Chinese market.
Heineken also acknowledged that its second-quarter performance fell short of expectations, attributing the disappointing results to several factors. These include intensified competition in the low-cost beer segment in Brazil, unfavorable weather conditions in Europe during June, and persistently low consumer confidence and economic sentiment in developed countries.
The company noted that while some markets, such as the Middle East and Africa, have experienced reduced prices for raw materials and energy, these benefits have been offset by currency fluctuations and ongoing concerns about inflation.
Heineken's half-year results have left investors disappointed, causing the company's shares to plummet by nearly 8%.