Carlsberg Brewery Malaysia is hoping the Government will not impose further increase in excise duty in the upcoming Budget 2022 in hopes of to ease the burden on the F&B businesses and retailers who rely on beer as a important revenue source.
The entertainment sector which includes bars and pubs was been closed for more than 11 weeks and remains that way in states under Phase 1, this has severely affected incomes for these operators despite being allowed to offer takeaways. A resolution is needed to save thousands of jobs, incomes and businesses before a domino effect is triggered.
Under the unprecedented circumstance, Carlsberg also expresses concerns that the lockdown in particularly Malaysia has led to the proliferation of the illicit beer trade which will result in serious public health risks, as well as severe impacts to its export revenue. The consequence which can lead to reduced tax collection for the government.
Carlsberg reported a flat revenue (+0.5%) of RM881.2 million this year while its net profit grew 23.9% to RM103.6 million for the first half ended 30 June 2021 (1HFY21) compared to the same period last year, reflecting the impacts of the different lockdown operating environments.
Coming off a low base due to 2020, for the quarter ended the Group’s net profit increased by 248.8% to RM37.1 million on the back of revenue growth of 21.6% to RM349.2 million versus the same quarter last year when the Group’s operations were more acutely impacted by nationwide COVID-19 lockdowns in Malaysia and Singapore.
Revenue for Malaysia’s operations for the half year fell 8.2% to RM600.2 million whilst profit from operations increased by 16.1% to RM100.1 million in 1HFY21 versus the same period last year. Reported revenue for Q2FY21 improved by 17.1% to RM243.6 million whilst profit from operations was up 217.9% to RM38.0 million against the same quarter last year.
In Malaysia, the easing of restrictions in February 2021 during the Movement Control Order (MCO) 2.0 allowing dine-in F&B operations coupled with new product and packaging launches helped deliver growth for Q2FY21. However, the re-imposition of MCO 3.0 suspending dine-in and the subsequent Full MCO in June which resulted in the full suspension of brewery operations took a toll on revenue for the quarter, which was partially mitigated by the Group’s cost controls. Profitability for Q2FY21 was enhanced by the continuous improvement in cost control and the absence of the one-off RM6.4 million bill-of-demand settlement paid last year to the Royal Malaysian Customs of Selangor.
Managing Director Stefano Clini said, “The FMCO in June was the second time our brewery operations were suspended since national lockdowns began in March 2020. Last year, we faced a seven-week disruption and this time our operations were suspended for eleven weeks. This is unprecedented in the history of the Group with severe impacts to our business where the full effects were only partially evident in Q2FY21 as the suspension was imposed from the last month of the quarter.”
