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Heineken profits hit by currency volatility including pound plunge

Dutch beer-maker Heineken (LSE: 0O26.L - news) has reported a hit to its profits due to volatility in global currency markets - partly thanks to the Brexit vote..

In its results for 2016, released on Wednesday, the company revealed its profit before tax dropped to £2.1bn compared with £2.4bn for 2015.

Heineken said the fall was due to comparison with a one-off accounting gain the previous year - with underlying earnings up 9.9%.

The brewer said volatility in global currency markets - particularly the Mexican peso, the Nigerian naira and the British pound - had cost it about £976m, and the firm expects to be a further £30m out of pocket in 2017.

But it was not all bad news for the company. Revenues increased by 1.4% overall and while beer sales in the UK declined slightly, its premium markets saw double digit growth.

Heineken's premium beer brands include Desperados, Sol (LSE: 0NJP.L - news) and Tiger beers.

The company said its new cider offerings have been well received in the UK and sales of its flagship cider brand Strongbow were also strong.

Jean-Francois van Boxmeer, chief executive of Heineken, said: "We delivered strong results in 2016, with clear outperformance of our premium brand portfolio led by Heineken, and sustained momentum from our innovation agenda."

Heineken said its planned acquisition of Punch Taverns (Other OTC: PCTVF - news) in partnership with private equity firm Patron Capital is expected to complete in the first half of this year.

The deal, which has valued Punch Taverns at almost £403m, will see Heineken acquire 1,895 new pubs while Patron will take over the remaining 1,329.