Bulgaria: Heineken’s Zagorka brewery reports 2.8% increase in operating profit in 2016

The operating profit of Bulgaria's Zagorka, part of Dutch group Heineken, rose by 2.8% to a record-high 26.9 million levs ($14.98 million/13.74 million euro) in 2016, Zagorka's CEO said on April 27.

"The positive results were due to many factors including a growing number of tourists, rising consumption, good economic conditions and a slight increase of the beer market of the country among others," Nikos Zois is quoted as saying by SeeNews.

Sales revenues rose by 1.2% to 160 million levs in 2016 as sales volume edged up 0.5%.

"We are enjoying a good level of sales in the premium market, and trying to introduce new products in our portfolio, in order to position ourselves in the best way because beer market in Bulgaria is highly saturated and is not expected to grow drastically in the coming years," Zois said.

The Bulgarian beer market rose slightly to 5.2 mln hectolitres in 2016, as average per capita consumption stood at 73 litres, according to data provided by Zagorka.

Zagorka's sales of canned beer have been gradually improving but PET beer bottles continue to hold the largest share of company's sales, Zois added.

In the next three years the company plans to invest a total of 22 million euro in its water treatment plant, bottling line and horizontal beer tanks which will increase the quality of production at its brewery in Stara Zagora, in the southeast of the country.

In 2016 Zagorka invested 11.5 million levs, mainly in its water treatment plant and production line for canned beer.

Zagorka holds about 28.5% of the beer market in Bulgaria in terms of sales.

It is currently introducing to the market a new brand of non-alcoholic beer.

On the Bulgarian market Zagorka is competing with Kamenitza, owned by U.S.-based Molson Coors, Carlsberg Bulgaria, part of Danish brewer Carlsberg, and locally-owned brewers Boliarka VT, Britos and Lomsko pivo.

In 1994, a joint company of Heineken and Coca Cola HBC acquired 80% of Zagorka for $21.7 million. In 2014, the Dutch beer maker acquired Coca-Cola HBC's indirect shareholding in Zagorka, raising its stake to 98.86%.

E-malt.com, the global information source for the brewing and malting industry professionals. The bi-weekly E-malt.com Newsletters feature latest industry news, statistics in graphs and tables, world barley and malt prices, and other relevant information. Click here to get full access to E-malt.com. If you are a Castle Malting client, you can get free access to E-malt.com website and publications. Contact us for more information at marketing@castlemalting.com .