03 August 2021 | Business

Heineken doubles profit

Heineken, the world's second-largest brewer, reported first-half earnings above expectations on Monday, but warned of weakness in the rest of the year as costs eat into margins and the Covid-19 pandemic continues to hit key markets.

The maker of Europe's top-selling lager Heineken, Tiger and Sol, said operating profit before one-offs doubled to 1.63 billion euros (US$1.93 billion), compared with the average forecast in a company-compiled poll of 1.22 billion euros.

Dolf van den Brink, who has been chief executive for a year, said the company was pleased with a strong set of first-half results, but said there was reason for caution, with results expected to remain below pre-pandemic levels in 2021 as a whole.

Covid-19 would remain a factor, with the biggest impact in key markets in Africa and Asia. Rising commodity costs would also start affecting Heineken in the second half of 2021 and would have a "material effect" in 2022.

Heineken previously forecast that market conditions should improve in the second half of 2021, depending on vaccine roll-outs. -Nampa/Reuters

HSBC profit more than doubles

HSBC Holdings reported forecast-beating first-half pre-tax profit that more than doubled from a weak performance last year when it made huge provisions for pandemic-related bad loans.

Encouraged by an economic rebound in Hong Kong and Britain, its two biggest markets, HSBC reinstated dividend payments and released US$700 million that had been set aside to cover potential bad loans.

That compares with US$6.9 billion in loan-loss provisions made in the same period a year ago. Pre-tax profit for Europe's biggest bank by assets came in at US$10.8 billion versus US$4.32 billion in the same period a year earlier and was higher than the US$9.45 billion average of 15 analysts' estimates compiled by the bank.

Revenue, however, fell 4% due to the low interest rate environment. HSBC said given the brighter outlook globally as economies recover better than expected from the pandemic, it expects credit losses to be below its medium-term forecast of 0.3%-0.4% of its loans.

The bank also said that for the year, it could even make a net release of funds from earlier provisions rather than add to them, but it was hard to say definitely due to the unknown impact of government support programmes, vaccine rollouts and new strains of the virus. -Nampa/Reuters