A glass of Heineken sits at a restaurant in Hanoi, Vietnam, on May 30, 2019.KHAM/Reuters
Heineken, the world’s second largest brewer, suffered a decline in beer sales in the first three months of the year, forecast worse to come in the second quarter and scrapped its 2020 guidance due to the coronavirus crisis.
The brewer of Heineken, Tiger and Sol beers and Strongbow cider said on Wednesday it believed beer sales fell by 2 per cent in the first quarter and overall volumes, including cider and soft drinks, by 4 per cent.
“The impact is expected to worsen in the second quarter,” the company said in a statement.
The Dutch brewer later said it would not carry out permanent layoffs as a consequence of the crisis during 2020 and would continue to pay suppliers based on agreed payment terms, with early payments to those that were smaller and more vulnerable.
It said it had entered the crisis with a strong balance sheet and undrawn committed credit facilities and had secured additional financing on the debt market in recent weeks. It placed 1.4 billion euros ($1.52 billion) of five- and 10-year notes in late March.
Heineken, whose major markets are Brazil, Mexico and Vietnam, said it would provide more information on its actions to mitigate the impact of the coronavirus crisis in its first quarter trading update on April 22.
“In any case, the lack of visibility on the end date of the COVID-19 pandemic and the duration of its impact on the economy leads Heineken to withdraw all guidance for 2020,” it said.
In February, it had said it expected revenue growth and a mid-single digit percentage increase of its operating profit before exceptional items.
Be smart with your money. Get the latest investing insights delivered right to your inbox three times a week, with the Globe Investor newsletter. Sign up today.