Heineken extracts fatter annual dividend from DB than profit in 2014

DB paid dividends totalling $32.1 million in calendar 2014.

For the second year in a row, global beer group Heineken NV has pulled out a bigger dividend than its New Zealand subsidiary, DB Breweries, earned.

Auckland-based DB paid dividends totalling $32.1 million in calendar 2014, more than the $22.4 million profit reported that year, according to financial statements lodged with the Companies Office. The Dutch parent, which took control of the local company in late 2012, extracted $123.2 million in 2013, when DB reported a profit of $38.8 million in the 15 months ended Dec. 31, 2013.

That takes total dividends extracted by Heineken since taking over DB parent Asia Pacific Breweries to $155.3 million, almost half the $331 million value ascribed to DB at the time of the purchase.

Government figures show the total volume of beer available for sale in New Zealand has been sliding for three decades, reflecting changing consumer tastes toward wine, cider and the ready-to-drink 'alco-pops' favoured by young drinkers. Statistics New Zealand figures show the total volume of beer available for consumption fell 2.3 percent in 2014 to 282 million litres.

DB's financial statements show the liquor company reported annual sales of $503.9 million in 2014, or the equivalent of $42 million a month. In the prior 15-month period, DB posted sales of $676.5 million, or $56.4 million a month.

The company declined to comment on the result.

DB has targeted New Zealand's growing cider market to counter declining beer sales. Earlier this year, chief executive Andy Routley told BusinessDesk the brewer expects local cider sales to double in the next five years to about 12 percent the size of the beer market. In the UK, cider now equates to 20 percent of the beer market.

The New Zealand brewer is seen as something of a global test bed for cider for its Dutch parent, with Monteiths, Old Mout, and Orchard Thieves in Heineken's global brand portfolio for potential development in other countries.

Routley said some 56 percent of Old Mout cider is sold outside New Zealand and the UK operation pays DB a royalty for making the brand there. DB directly exports its cider brands into Australia and western Europe and is now eyeing up Asia.