By Yakubu LAAH InvestAdvocate
Lagos (INVESTADVOCATE) –Heineken NV, the world’s third-largest brewer on Wednesday said it has increased its proposed dividend payout to investors by 16 percent; while projecting a slower growth rate in 2015, a Reuters report said.
The brewer increased its proposed dividend payout in the review period of 2014 to 1.10 euros from 0.95 euro. It increased its dividend payout ratio to between 30 and 40 percent of net profit from 30 to 35 percent.
Heineken has projected slowing sales and margin growth in 2015, after a year marked by emerging market expansion and the soccer World Cup allowed a sharp dividend hike.
According to the company, consolidated operating profit before one-off items rose 6.4 percent to 3.13 billion euros ($3.5 billion), just above the average of 3.11 billion in a Reuter’s poll of nine analysts the report said.
Also, profit before some items rose 11 percent to 1.76 billion euros ($2 billion) in 2014, this the Dutch brewer noted it benefited from increased beer sales in Africa, the Americas and Asia.
The brewer said margin expansion was greatest in Nigeria, Brazil, Mexico and Vietnam.
Jean-Francois Van Boxmeer, chief executive officer (CEO) of Heineken noted Nigeria could feel the impact of security concerns and lower oil prices, the company could weather shocks there.
Heineken says, all things being equal, it could gain 130 million euros in operating profit this year from the weaker euro. “However, exports to the United States would only show benefits from the stronger dollar from 2016 because of hedging,” the report quoted the company as saying.
The report quoted Andrew Holland, analyst at Societe Generale as saying “It’s 14 percent ahead. When investors are floundering around for ideas for income, that rates as good.”
Heineken, in which Mexico’s Femsa is a major shareholder and which competes with the likes of SABMiller (SAB.L) and AB Inbev affirmed it expected revenue to grow in 2015, but with slower expansion of beer sales than in 2014, partly because the first half of last year was so strong.
“For 2015, it would take a 25 basis point hit from the sale of its Mexican packaging business, meaning margin expansion would be below its 40 point annual target. It grew by 90 basis points in 2014,” the report noted.
The company says it suffered in the past from contraction in Europe negating the effect of expansion in developing markets. It disclosed that Europe was less of a drag last year, with western European revenue up 0.3 percent and operating profit down just 0.1 percent. “Europe as a whole delivered about half of group revenue and just over a third of operating profit last year,” the report added.
