Malaysia: Carlsberg Brewery Malaysia Bhd’s sales volume yet to normalise to pre-pandemic levels

Carlsberg Brewery Malaysia Bhd’s sales volume has yet to normalise to pre-pandemic levels and this has been dragged down by the soft consumer sentiment and inflationary pressures, The Star reported on August 26.

However, the key growth driver has been the premiumisation of product mix. This should continue in view of the strategy to focus on premium brands, further supported by the recent price increases in April.

The trend of easing input costs will have little bearing on the financial year 2024 (FY24) margin, given the hedging in place, said RHB Research.

Similarly, the stronger ringgit could only result in minor cost savings considering the low percentage of input cost/revenue and Singapore exposure. However, Carlsberg’s management did observe a pick-up in consumer sentiment following the strong rebound in the ringgit, it said.

It said more new product launches are in the pipeline to excite the market.

UOB Kay Hian Research said upcoming results are expected to be sequentially similar before sales volume starts to pick up again at end-2024. The lack of major festivities and generally cloudy consumer sentiment signals a quiet third quarter 2024 (3Q24).

Looking to 4Q24 and beyond, it expects results to be seasonally strong with the earlier Chinese New Year in 2025 potentially pushing back some pre-sales to 4Q24.

TA Research expects on-trade sales to improve gradually in the future, driven by increased outbound tourism and government initiatives to boost tourism in Malaysia.

Hong Leong Investment Bank Research expects FY24 to be a transitional year for Carlsberg, projecting flat earnings growth.

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