Heineken reports 87 percent fall in full year profit

Heineken reported an 87 percent fall in net profit for the full year 2008, due mainly to writedowns in the value of businesses and a weak market in Britain, where the recession and a smoking ban hurt sales.

Net profit was 209 million euros, down from 807 million in 2007. Sales rose 27 percent to 14.3 billion euros, boosted by the company's 10.2 billion acquisition of Scottish & Newcastle in May, which made it the largest brewer in Britain. The company doesn't report quarterly earnings.

Chief executive Jean-Francois van Boxmeer said that "organic growth" – a nonstandard measure that strips out the effects of acquisitions – in sales and operating profits would have been 7.4 percent and flat, respectively. He said that was better than expected. However, actual earnings were hurt bywritedowns, higher costs to finance debt, and the performance of newly acquired operations.

"In particular, the performance in the UK was below expectations as the combination of recession...unprecedented excise duty rises, the smoking ban and the fall in the British pound made the market exceptionally challenging."

Van Boxmeer said the company would cut costs, restructure parts of its business, invest in brands and adjust pricing in response to the economic downturn. "Our business is robust but not immune to the challenges posed by the global economic downturn," he said.