Heineken needs to swing to a loss for first half, following the globes second-largest brewer slashed the worth of their assets by 550m in coronavirus pandemic.

The dutch group, which tends to make brands eg amstel, tiger and moretti, stated on thursday it expected a net loss in about 300m in 2nd quarter down from a net profit of 1bn per year earlier on because of the impairment charges.

Net revenues in the brewer declined 16.4 percent on a natural basis after alcohol sales had been greatly affected throughout the world by lockdowns together with closures of restaurants and bars.

Stocks in brewer fell 3.9 percent to 83.26 during the early amsterdam trading, after the even worse than expected figures revealed a 52.5 percent dive in working profit when it comes to first six months of the year.

The figures illustrate the process faced by the companys brand new chief executive, dolf van den brink, whom took over final month from veteran jean-franois van boxmeer.

As you expected, the impact regarding the covid-19 crisis deepened in the 2nd one-fourth of 2020, heineken said. after a reduced part of april, volume began to slowly recover into june as lockdowns had been raised all over the world and customers restored depleted inventories.

Analysts said the group had particularly experienced due to a solid existence in mexico and south africa, each of which banned liquor sales for periods of time during their lockdowns. trevor stirling, analyst at bernstein, labeled as the numbers extremely weak.

Heineken failed to provide additional information on the impairment charges, but mr stirling stated they most likely regarding an integral part of the company that is poor recently, but coronavirus tipped them over the side. the teams nigerian company, like, would fit this information, he added.

Heineken may be the first of the main brewers to endure these types of impairment charges considering that the pandemic began.

The figures come after competing carlsberg reported better than expected first-half numbers, saying it expected earnings become down 8.9 %. mr stirling said heineken havent relocated because aggressively as carlsberg on cost-cutting, but that should start to show up within the last half.

Heineken took significant cost-cutting actions from late march but would boost these, it said, because it issued initial figures before a complete release on august 3.

Also selling less beer, heineken made less cash from each beverage offered, with web income per hectolitre down 3.6 percent.

The brewer stated its heineken brand name had done a lot better than others, with a drop in sales of just 2.5 per cent and particularly strong performance in areas eg brazil, asia as well as the uk.

Edward mundy, analyst at jefferies, said: we believe consumers are opting for well-known brands, with minimal downtrading despite considerable tension during covid-19.

Total alcohol sales tend to be recuperating in markets including spain as pubs and restaurants reopen, said mr stirling. but some countries tend to be imposing continuous restrictions to avoid virus transmission through large personal gatherings.