Carlsberg Brewery Malaysia Berhad has recorded a 10.6 percent decline in revenue to RM 589.9 million whilst net profit slipped 16.7 percent to RM 73.0 million for the quarter ended March 31 as compared to 2019.
The decline was a result of the impact caused by the Covid-19 outbreak and the implementation of Movement Control Order (MCO) as operations were suspended and on-trade sales were affected in both Malaysia and Singapore.
In Malaysia, Carlsberg saw revenue down by 11.3 percent to RM 445.5 million and profit from operations dropped by 18.3 percent to Rm 74.2 million in Q1FY20 against the corresponding quarter last year.
“This is mainly due to an earlier Chinese New Year (CNY) trade loading in December 2019, the absence of trade loading in March this year and lower sales following the MCO that commenced on March 18,” the Group said.
As for Carlsberg Singapore Pte. Ltd. , revenue saw a decline by 8.6 percent to RM 144.5 million and lower profit from operations by 14.4 percent to RM 17.7 million for Q1FY20 as compared to the same quarter last year. This was due to the Covid-19 circuit-breaker that is in place.
Earnings per share was 23.9 sen, lower by 16.7 percent compared with 28.7 sen for the corresponding quarter last year.
Following the impact, the Board of Directors of the Group (Board) has decided to suspend the quarterly dividend payments for the financial year ending Dec 31, 2020 to ensure a more prudent focus on preserving cash and liquidity, and with the intent to strike a balance between the long-term health of the organisation and dividends to shareholders.
“The impact of Covid-19 in Malaysia and Singapore has generated a high degree of volatility and uncertainty. Hence, we believe it is a
sound and timely call to suspend the quarterly dividend payments to ensure the Group is financially and commercially healthy,” said Managing Director Stefano Clini.
“Covid-19 has severely impacted our operations in Malaysia and Singapore, as well as our investment in Sri Lanka. It will inevitably have an adverse impact on our business and financial performance in 2020.
Commenting on the outlook, Clini said, “Our SAIL’22 corporate strategy remains unchanged. Additionally, during this crisis we are guided by the Carlsberg Group’s Covid-19 leadership triangle that balances between ‘Situational Leadership’, ‘Defend Operating Profit and Cash’ and ‘Prepare for the Rebound’.”
“The regulations set during the Conditional MCO in Malaysia and CB in Singapore took a heavy toll on on-trade sales and consumer sentiment. Though many eateries and restaurants have reopened with dine-in whilst observing social distancing and other health and safety guidelines, we anticipate a slow recovery in on-trade due to reduced capacity and shorter operating hours thus affecting consumer consumption in the coming months and deteriorating macroeconomic conditions,” Clini explained.