Heineken drops as brewer cuts forecast on waning consumption

INdePeNdeN T tower company PhilTower Consortium Inc. said on Monday it has started the full operations of a portion of the towers that it acquired from globe Telecom Inc.

Saying that this is a “quick turnaround” from a February deal, PhilTower CeO devid gubiani said this reflects the company’s “organizational readiness and capabilities in completing all processes and requirements to run autonomous end-toend operations.”

“This is yet another big milestone for us of full operational handover of towers from globe. PhilTower believes in its organizational pillars such as people, process, technology readiness and a faster way of asset management to achieve takeover in a short span of time,” he said.

In September 2022, PhilTower and globe signed a seal and leaseback deal for the acquisition of 1,350 towers from globe. The 578 towers were turned over in February.

Since then, PhilTower established two regional operational centers and “ramped up resources to ensure a smooth transition.”

PhilTower is currently operating towers in 17 major islands of Visayas and Mindanao, covering most of the provinces. Lorenz S. Marasigan

He I N e K e N NV shares plunged after the d utch brewer cut its earnings forecast on weakening consumption following double-digit price increases.

Operating profit slumped 22 percent on an adjusted basis in the first half, the a msterdam-based brewer said Monday. Beer volume dropped more than expected as Heineken boosted pricing by almost 13 percent.

Brewers are struggling to pass high raw material costs onto consumers without driving them away to cheaper brands. Heineken is the first of the big global beermakers to report first-half results, and its results may portend difficulties for rivals a nheuser-Busch InBev NV and Carlsberg a /S.

“The start of the year was all about passing on the inflation on our input costs,” Chief executive Officer dolf van den Brink said in an interview. “We front-loaded our pricing. We ran into a pretty strong economic slowdown in the key market of Vietnam, which is disproportionately important to us.”

The stock fell as much as 6.4 percent. a nalysts were skeptical that the second-half rebound will be strong enough to meet the new lowered guidance. For the full year, Heineken now forecasts stable to mid-single digit operating profit growth.

“The credibility of Heineken’s guidance is now in question,” Citi analyst Simon Hales wrote. He said the results are extremely disappointing.

The dutch brewer forecast cost inflation to ease next year, which will reduce pressure to raise prices. Previously the guidance was for midto high-single digit earnings growth.

Vietnam and Nigeria accounted for more than half of the drop in firsthalf consumption, and demand in the a mericas was soft, Heineken said.

The dutch company is the largest premium brewer in Vietnam, where it has been active for three decades, selling brands such as Tiger.

“This is the worst set of results we’ve had so far,” wrote RBC analysts James edwardes Jones and emma l etheren, referring to the consumer companies they cover.

Russian woes

HeINeK eN increased the impairment for its Russian business to €201 million ($221 million), writing down its entire value. The company said it’s still working to sell the unit, and it doesn’t expect any financial gain from the ongoing business or any divestment.

“It is incredibly challenging to make an exit,” Van den Brink said. “We want to do it the right way, find a suitable buyer.” d e mand for premium beer, the source of 40 percent of Heineken’s revenue, is more resilient, the C e O said on Bloomberg TV.

Heineken predicted pricing will moderate and volumes will decline by a low singledigit percentage in the second half. The company is counting on a turnaround in profit during the period.

“People are drinking less, but they are drinking better.” Bloomberg News

HOMegROW N a l legro Beverage Corp. (a BC), one of the biggest coffee machine distributors in the Philippines that is majority owned by UCC Holdings Japan, opened on Monday its new office and showroom in Mandaluyong City.

The company said the opening of the new office is in line with its “aggressive expansion” to become “a holistic coffee solutions provider” nationwide.

“This year marks the 24th year of a l legro in the coffee industry. a nd with all the changes, our new and beautiful showroom and service center, and of course our rebranding, the a l legro family is truly ready to be your partner in brewing new opportunities,” a BC Chief executive Officer yasmin a Vasquez said during the ceremonial opening.

On the sidelines of the event, she told reporters that the company will branch out in l egazpi, a lbay in Bicol in October, and is keen on setting up shop in Palawan.

“These are [courtesy of our] dealers. So they will be having their own brands, but carrying all a l legro products,” she said.

The company has offices in Metro Manila, Cebu, davao, and Pampanga, as well as dealerships in Iloilo, Bohol, Quezon Province, l aguna, Cavite, and Pangasinan.

“So little by little, we’re inching our way to the far-flung areas to ensure that we get to service properly all our patrons, all our supporters.” a BC also said it will diversify its products. Its product line includes premium coffee brewed from Italy and freshly roasted by UCC, sauces, syrups, teas and oat milk. apart from the brick-and-mortar format, Vasquez said e-commerce has been a “steady revenue generating segment” for them.

“When april hit, we’ve been do- ing very well and, then, it’s increasing [to] 1 million sales in one month for online.” a side from consumer goods, a BC a lso offers industrial equipment, traditional and fully automatic espresso machines. It sells its products cafes, hotels, and even pop-up coffee shops all over the country.

Vasquez said Crem, a coffee machine made in Spain, is the most popular among startup cafes while Franke, a fully automatic espresso machine from Switzerland, is widely used by prime and deluxe hotels.

“We are now looking at other brands to support also those who wish to avail of freshly brewed coffee in their homes. So we will try to bring in more of home use equipment and other brand products.”

The company’s expansion plans are geared towards the constant coffee trend not only in the Philippines, but also in other parts of the world.

UCC Philippines President and CeO Hubert U. young noted that Filipinos started brewing coffee as part of their daily routine during the lockdowns.

“That was a trend really. a nd that’s the reason why everybody’s into coffee now,” he said. “a nd it’s still there [even after the end of the pandemic]. In fact, it opened up a new market, which is the home.”

Kosuke Fujishima, executive officer of UCC Holdings and COO of UCC a sia Pacific, agreed with him, saying that the coffee trend is also apparent in other markets overseas like Japan, europe and a sia, where they also operate.

“Our business also skyrocketed even slightly around the second or third year of Covid. a nd even now, it’s growing. It’s because of the consumption. everybody spends more time for coffee, and even some go even like coffee machines in their own house.” Roderick L. Abad