U.S. News

Heineken Tops Profit Growth Expectations

By CNBC.com with contributions from Reuters

Heineken's full-year operating profit exceeded market expectations Wednesday, as growth in the Americas and Eastern Europe drove sales.

Heineken reported net profit of 930 million euros ($1.21 billion) for 2006, up 12.6% from the 840 million euros ($1.10 billion) earned in 2005.

The company posted a 2006 operating profit of 1.6 billion euros ($ 2.10 billion), excluding certain items, an increase of 12.7% compared to year-ago figure of 1.4 billion euros ($1.83 billion). Revenues were 11.8 billion euros ($15.45 billion).

The results were about in line with the mean forecast in a Reuters' poll of 11 analysts for operating profit of 1.6 billion euros and ales of 11.9 billion euros ($15.58 billion).

“Heineken expects to achieve organic growth in net profit in the range of 10% to 33% in 2007," Heineken Chairman and CE Jean-François van Boxmeer said in a statement.

Heineken Sees Strong Growth

The Dutch brewery also proposed a dividend increase of 50% to 0.60 euros ($0.78) per share.

But the company also sounded a note of caution, predicting costs to rise.

“We expect the row and packaging materials to go up by 7%-8%," Rene Hoof Graafland, chief financial officer of Heineken, told "Squawk Box Europe." "This is a huge increase … We will try to pass these on to our customers to a certain extent, because it is an industry issue."

In Amsterdam, Heineken shares fell by 1.75%.