BRUSSELS (Reuters), – Heineken’s (OTC:) mid-term profit margin targets are in doubt after it reported higher earnings than expected for 2021, owing to increased costs and cost savings.

According to the second largest brewery in the world, COVID-19 would continue to impact revenues for 2022. The COVID-19 outbreak would also have significant effects on supply chain and inflation.

In a statement the company claimed that they expect an overall stable to modest improvement in operating profits (beia) by 2022. The figures are before amortisation and exceptional items.

Heineken is Europe’s most popular lager Heineken. Tiger, Sol, Sol, and Strongbow cider are its top sellers. However, the company stated it still wanted to achieve an operating profit margin in excess of 17% for 2023. There was also increased uncertainty due to economic factors and increasing input costs.

The company stated that it will update the 2023 guidance in the latter part of this year.

With increases in all regions, except Asia, in beer sales, price rises, as well as a shift towards more costly beers, Dutch brewers sold 4.6% less beer in 2021 than they did in 2020. This drove 12.2% net revenue growth.

Operating profit at Heineken rose by 43.8% to 3.41 billion euro ($3.87 billion) on a similar basis, above its previously reported consensus of 3.30 billion euros. Heineken previously stated that its results for 2021 would not be as good as those in 2019.

Heineken stated that it has now reached 1.3 billion Euros of a total 2 billion Euro saving plan, which involves the elimination of 8,000 jobs.

($1 = 0.8804 euros)