Poland: Heineken Polish arm, Zywiec, posted 25% net profit drop in Q1 2005
Heineken group's Zywiec, the second largest beer maker of Poland, announced on March 13 its consolidated net profit decreased by about 25%, to PLN 32.95 million, in the first quarter of 2005 despite a slight 4.25% yearly increase in sales revenues to PLN 548.33 million.
The results have not stopped the brewer's aspiration of becoming the Polish beer-market's leader (it is currently no.2 after SAB Miller’s Kompania Piwowarska), which it hopes to achieve through a major restructuring program. In the same period of 2004 Zywiec recorded a PLN 43.9 million net profit on PLN 525.97 million revenues.
"The process of restructuring the Zywiec capital group into a client-focused company with strong brands and a good distribution network is underway. The management board is convinced that the completion of this process will secure the capital group the first position on the market. Restructuring the brand portfolio and the financial structure will allow the group to reach a new stage where the focus is on result improvement and the construction of a strong organization," the report reads.
The brewer remains optimistic about the future. "Considering...the economic conditions, the Zywiec management board is optimistic about the perspective of recording profits in the future," the company states. Zywiec, which is currently no.2 on the Polish beer market, said in April that it expects to grow along with the market in 2005 and increase market share. Zywiec's market share is estimated at 36%.
Zywiec CEO Nico Nusmeier said at the time that, although it's hard to predict beer sales before the peak time in the summer months, the company has returned to the expected level of 3-3.5% growth after poor results in Q2 and Q3 2004.
Zywiec increased consolidated net profit by 34% to PLN 277 million in 2004 from PLN 206 million the year before due to a policy of cost-cutting and the optimization of activities. Consolidated net sales increased by 13%, reaching PLN 3.63 billion in 2004, while consolidated net sales volume swelled 1 million hl year on year, reaching 10.1 million hl, a new record level in the sector.
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