AMSTERDAM (AP) - Heineken NV, the world's third largest brewer, said Wednesday it is going to ramp up its advertising spend this year as it reported a 22 percent increase in first-quarter sales despite widespread price reductions.
Net profit was 151 million ($217 million). The family-controlled company issues only partial financial information on a quarterly basis, and did not provide a net profit comparison figure.
It said sales grew 22 percent to 3.59 billion from a year ago, mostly due to the company's acquisition of Dos Equis and other brands from Mexico's FEMSA. Operating profit was also boosted 20 percent by the Dos Equis purchase.
Comparing like for like, sales were up 3.6 percent, Heineken said, as it sold larger volumes of beer despite lower prices in its wholesale business.
The company said its brewing costs per hectoliter were "in line" with what they were a year ago - surprising, given the sharp rise in grain prices.
Shares fell 1.6 percent to 39.56 in early trading.
By region, the company's performance closely reflected macroeconomic developments, with volumes down in Spain, Ireland, Portugal and Greece, but up more than 10 percent in Africa and Asia. Volumes were also up in Brazil, Chile and Mexico.
"Heineken remains confident in continued positive volume development in Latin America, Africa and Asia," the company said in a statement Wednesday. "Whilst we are witnessing gradually improving economic conditions in a number of countries in Europe and in the USA, consumers remain cautious with their spending behavior."
It said it expects to spend more money on advertising in the U.S., Britain, Spain, Greece, Poland and Canada this year, which will hurt profits.
"However, we expect this investment to support our focus on long-term brand equity building ... in key markets," it said.