Malaysia: Carlsberg Brewery Malaysia reports decline in third-quarter revenue

Carlsberg Brewery Malaysia Berhad (the Group) has reported a decline in revenue of 10.2% to RM513.4 million and a decline of 0.6% in net profit to RM75.9 million for the third quarter ended Sept 30, 2023 (Q3FY23) versus the same quarter last year due to a weaker trading environment and softer consumer sentiment, The Sun Daily said on November 1.

The decline in revenue was mitigated at net profit level by the absence of the prosperity tax imposed last year as well as higher share of profit from the Group’s Sri Lankan-based associate company Lion Brewery (Ceylon) PLC.

The Group’s earnings per share (EPS) for Q3FY23 were 24.84 sen, compared to 24.98 sen in Q3FY22.

The Board of Directors announced an interim dividend of 19 sen per share for Q3FY23. This brings the total interim dividend for nine months to 62 sen per share.

For the cumulative nine months ended Sept 30, 2023 (9MFY23), the Group’s revenue decreased by 6.6% to RM1.68 billion, while its net profit declined by 3.0% to RM249.2 million against the same period last year. The subdued performance is due to weaker consumer sentiment, compared to the post-Omicron recovery and pent-up consumer demand a year ago in both Malaysia and Singapore.

This was mitigated by an increase in profit from the Group’s Sri Lankan-based associate company Lion Brewery (Ceylon) PLC due to stronger business performance and the absence of one-off surcharge tax expense of RM3.7 million incurred last year.

Carlsberg Malaysia’s managing director Stefano Clini commented: “The persistent weak consumer sentiment has continued to affect our third-quarter results. The higher interest rates and ongoing concerns over the escalating cost of living, particularly the rising cost of food amidst the backdrop of global economic uncertainty, continue to put pressure on consumer spending”.

In addition, on Oct 23, 2023, the Group took home the highest ‘Return-on-Equity’ Award over a three-year period for the fourth consecutive time, within the Consumer Products & Services category, at The Edge Billion Ringgit Club (BRC) Awards 2023. As reported in its Integrated Annual Report 2022, the Group has a return on shareholders’ fund of 181.1% in 2022, 107.9% in 2021 and 105.1% in 2020 respectively.

On prospects, the Group maintains a cautious outlook due to the anticipated higher inflationary pressures, and rising interest rates that are expected to depress consumer spending. On the other hand, the end of Prosperity Tax 2022 in Malaysia will positively impact the Group’s net profit.

Guided by the SAIL’27 strategy, the Group will continue to invest and grow our well-positioned portfolio of brands, whilst staying focused and vigilant on both its revenue management and cost optimisation initiatives.

On November 1, the Group has entered into a Memorandum of Understanding (MoU) with Sapporo Breweries Ltd for the exclusive manufacturing and distribution of Sapporo Premium Beer in Malaysia commencing from 2024. Similarly, the Group’s Singaporean operations shall have joint-distribution rights to sell and distribute both Sapporo Premium Beer and Yebisu.

“We are pleased to announce our partnership with the pioneer premium beer brand in Japan. Sapporo, with its rich history and high standard of quality, perfectly aligns with our SAIL’27 premiumisation strategy. Our partnership marks the beginning of an exciting journey as we are here to build the brand over the long term, and we look forward to a successful launch next year. The annual net profit impact of the non-renewal of Asahi to the Group (approximately RM30m) will be progressively mitigated by the introduction of Sapporo with effect from 2024,” said Clini.

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 .