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Trending tickers: Heineken, Dunelm, BP, Uber

The latest investor updates on stocks that are trending on Wednesday

Heineken warned profits could fall below estimates, and that high inflation would impact demand for beer,
Heineken warned profits could fall below estimates, and that high inflation would impact demand for beer, (caro, Agencja Fotograficzna Caro)

Heineken (HEIA.AS)

Heineken stock slumped 5% on Wednesday after it warned profits could fall below estimates, and that high inflation would impact demand for beer, thanks to geopolitical and economic volatility.

The Dutch brewer, which is the world’s second-biggest brewer after AB InBev (ABI.BR), said volumes fell by 4.7% last year, with more than 60% of that driven by declines in Vietnam and Nigeria, where economic and political conditions hurt sales.

Dolf van den Brink, chief executive, said: "We remain cautious about the global economic and geopolitical outlook."

Last year, beer brewers raised prices significantly to offset steep increases in costs, which saw overall sales figures of €36.3bn (£30.96bn/$38.88bn), up on the previous year’s €35bn. However, profits came in at €2.3bn, compared to the €2.7bn the year before.

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“This year, Heineken had to prioritise pricing to offset unprecedented levels of commodity and energy inflation," it said.

Read more: FTSE 100 LIVE: European stocks rise as UK inflation beats forecasts with 4% hold

Heineken added that this inflationary pressure tailed off towards the second half of the year, but highlighted that the economic climate would “remain a factor of uncertainty” into 2024.

It forecast future operating profits to be in the “low- to high-single-digit” range, with net profits lower than that due to currency and tax impacts.

Dunelm (DNLM.L)

Dunelm shareholders are set to receive a total of £103m through dividend payments as the group toasted strong sales and profits growth.

This will be through an interim ordinary dividend of 16p per share, up 7% from the first half a year earlier, as well as a £71m special dividend of 35p per share.

It came as pre-tax profits rose from £117.4m to £123m, while sales climbed 4.5% to £872.5m in the first half to 30 December.

Nick Wilkinson, chief executive, said: “Despite ongoing pressures on consumers, we are encouraged by the wide variety of new customers shopping with Dunelm, and existing shoppers also coming back more frequently.”

Read more: Stocks that are trending today

However, the Leicester-based homewares firm said recent improvements in profit margins will slow over its second half as it flagged that shipping costs are rising again, as well as a drag from currency movements.

“We are managing the impact of ships taking longer, more costly routes as they avoid the Red Sea area," it said.

“We have a tight grip on operating costs and were therefore able to partially offset some of the inflationary increases and investment through productivity and efficiency initiatives.”

BP (BP.L)

BP and Abu Dhabi National Oil Co, known as Adnoc, have struck a deal to form a joint venture in Egypt focusing on natural gas.

London-listed oil major BP will contribute its interests in three development concessions to the new tie-up, as well as exploration agreements in Egypt. Meanwhile, state-owned Adnoc will make a proportionate cash contribution which can be used for future growth opportunities.

The move is the latest in Adnoc’s push for international growth, following a multibillion-dollar pursuit of Covestro AG (1COV.DE), and the purchase of stakes in a gas field in Azerbaijan and a fertilizer company.

The deal gives Abu Dhabi a foothold in Egypt, which supplies liquefied natural gas to Europe.

Read more: What is inflation and what does it mean for you?

BP and Italy’s Eni SpA (E) have been working in the country for decades to develop fields and increase oil and gas production.

It comes as BP and Adnoc previously worked together on a deal for gas in the Mediterranean region through a joint bid for an Israeli producer. However, this is now on hold because of war in the region.

BP shares are up 0.6% in London at the time of writing.

Uber (UBER)

Uber was up more than 6% in pre-market trading in New York after it confirmed it will launch a $7bn (£5.6bn) share buyback after its first ever profitable year in 2023.

The share buyback is its first ever, thanks to a strong recovery in ride-share and healthy demand at its food delivery business.

"Today's authorization of our first-ever share repurchase program is a vote of confidence in the company's strong financial momentum," Prashanth Mahendra-Rajah, chief financial officer, said.

"We will be thoughtful as it relates to the pace of our buyback, beginning with actions that partially offset stock-based compensation, and working towards a consistent reduction in share count."

Over the next three years the ride-hailing firm expects gross bookings growth in the mid to high teens percentage and adjusted core profit growth in the high 30s to 40%.

Free cash flow as a percentage of adjusted earnings before interest, taxes, depreciation and amortization is expected to be 90% or higher annually, the company said.

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