Carlsberg Brewery Malaysia Berhad (the Group) posted commendable earnings for the quarter ended Sept 30 (3QFY20) versus the preceding quarter (2QFY20) as its production, sales and distribution in Malaysia and Singapore transitioned to the “new normal” amid the Covid-19 pandemic.
Net profit nearly tripled by 281.7 percent to RM40.6 million on the back of a revenue growth of 51.5 percent to RM435.3 million quarter-on-quarter. These improvements were the result of slow but promising recovery in the on-trade sector plus several cost control measures as the Group reset its businesses.
Comparing the quarter under review with the corresponding quarter in the previous year, the Group posted a lower revenue and net profit by 19.7 percent and 41.3 percent respectively. These were mainly due to lower sales but mitigated by lower marketing spend and reduction in operating expenses.
The Group also registered a higher share of profits of RM5.8 million from its associate company Lion Brewery (Ceylon) PLC (LBCP), an increase of 8.3 percent versus the same quarter last year, following the lifting of lockdown and curfew measures in Sri Lanka in end-June.
For the first nine months ended Sept 30 (9MFY20), the Group recorded a revenue of RM1.31 billion, a 22 percent decline, whilst profit from operations dropped 45.5 percent to RM153.8 million amid a challenging operating environment due to the pandemic.
In Malaysia, revenue for 9MFY20 slipped by 23.6 percent to RM942.0 million and profit from operations declined by 46.7 percent to RM113.0 million. On the comparable basis of Q3FY20 vs Q3FY19, revenue dropped 26.2 percent to RM288.5 million and profit from operations declined by 57.2 percent to RM26.8 million, attributable to lower sales which were partially offset by lower marketing and operating expenses.
Revenue of the Singapore operations for 9MFY20 was down by 17.6 percent to RM370.5 million whilst profit from operations dropped 41.5 percent to RM40.8 million compared to the same period last year. For the quarter under review, revenue declined by 3.1 percent to RM146.8 million whilst profit from operations slipped by 13.2 percent to RM21.6 million against the same quarter last year.
Group earnings per share for the quarter was 13.29 sen, lower by 41.3 percent as compared with 22.63 sen for the corresponding quarter last year.
The Board’s decision to suspend quarterly dividend payments for the financial year ending Dec 31 remains for Q3FY20.
Commenting on the Group’s improved performance, Managing Director Stefano Clini said, “Our diligence in implementing our business continuity roadmap, reprioritisation of costs, processes and structures, as well as a disciplined approach to our ‘Fund the Journey’ initiatives have paid off with a turnaround in performance for Q3FY20, especially with a refocusing on off-trade and e-commerce sales resulting in increased sales in these channels, boosted by the Carlsberg Liverpool FC Champions promotion.”
“We reiterate our shared stance as part of the Confederation of Malaysian Brewers Berhad on the potential losses to government tax revenue resulting from contraband beer. As such, we applaud the Malaysian government for not increasing excise duties on beer during the recent Budget 2021 announcement as we believe any increase will further incentivise illicit trade while making legitimate beer less affordable for consumers, especially in a time where local retailers and F&B operators are struggling to stay afloat,” he added.