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Heineken profits sink after Brexit vote

Dutch beer-maker Heineken (LSE: 0O26.L - news) has reported a 15% drop in profits thanks in part to volatility in the currency markets following the EU referendum result.

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.

The volatility in the pound following the Brexit vote has reportedly cost Heineken about £976m, with currency depreciation in other global markets also taking a toll.

It expects the volatility to cost the firm a further £30m 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.