Carlsberg Brewery Malaysia Berhad has reported a net profit of RM201 million for the full financial year ended 31 December 2021 recording an increase of 23.9% as compared to RM162.2 million, on the back of a flat revenue of RM1.8 billion.
The brewer adds that the higher earnings were mainly driven by cost optimisation, innovation and premiumisation initiatives. The top-line was impacted by lower sales due to an 11-week brewery operations suspension and dine-in restrictions in both Malaysia and Singapore markets. Guided by the corporate strategy SAIL’22, the Group defended its bottom-line by implementing stringent cost controls through discount optimization, lower sales and administration expenses, coupled with better premium mix leveraging on the launch of Connor’s Stout Porter in a can and Carlsberg Smooth Draught packaging innovations, and the new variant offerings of Somersby Watermelon Cider and 1664 Rosé in March and December respectively for the domestic market. In addition, the Group has doubled its e-commerce sales for both Malaysia and Singapore.
For the fourth quarter ended 31 December 2021 (Q4FY21), the Group saw an increase in both revenue and profit after its operations in Malaysia resumed in mid-August as the country entered the national recovery phase with more economic sectors reopened. Net profit rose by 88.2% to RM71.4 million in the quarter versus RM38.0 million in Q4FY20, with revenue up by 14.8% to RM542.3 million from RM472.5 million in Q4FY20.
In Malaysia, profit from operations grew by 39.4% to RM188.8 million in FY21 compared to last year, whilst revenue saw a 3.6% decline to RM1.21 billion. Profit from operations for Q4FY21 increased by 216.1% to RM70.9 million, while revenue rose 25.2% to RM394.7 million against the same quarter last year. The Group attributed the higher earnings of its Malaysia operations to lower costs following the restructuring efforts carried out in 2020 and the absence of the one-off RM6.4 million bill-of-demand settlement paid to the Royal Malaysian Customs Department of Selangor in 2020
The Singapore entity reported a 6.3% increase in revenue at RM561.1 million for FY21 despite the increased restrictions in dine-in capacity and re-imposition of suspension of entertainment outlets operations. Profit from operations, however, fell by 10.2% to RM58.0 million due to the higher cost of sourcing products from other Carlsberg markets when the Malaysian brewery was suspended, coupled with the absence of COVID-19 Job Support Scheme (JSS) Grant by the Singaporean government that was received in 2020.
The Group’s Sri Lankan-based associate company Lion Brewery (Ceylon) PLC registered growth in the share of profits of RM15.2 million in FY21 versus RM14.9 million in the previous year’s corresponding period due to the reopening of the economy in the country. For Q4FY21, its share of profit was 55.8% higher at RM5.6 million versus RM3.6 million in Q4FY20. The Group’s earnings per share (EPS) for FY21 was up 23.9% to 65.7 sen and Q4FY21 was 23.4 sen, an 88.2% increase compared to Q4FY20
The Group has proposed a single-tier final dividend of 46 sen per ordinary share for the financial year ended 31 December 2021, subject to the shareholders’ approval at the upcoming Annual General Meeting. This is equivalent to an RM140.6 million payment of the Group’s FY21 net profit, to be paid on 12th May 2022, with the notice of entitlement to be announced in due course. The total declared and proposed dividend for FY21 is 56 sen or equivalent to RM171.2 million, an increase of 40% versus FY20.
Managing Director Stefano Clini said: “We are satisfied with the Group’s overall financial performance and people health in 2021. Although the Group’s top-line was impacted by the adverse operating environment, we delivered a strong bottom-line as our Malaysian operations resumed some normalcy. With that, we are also excited to introduce new products in the coming months and also to launch promotions to help speed up the recovery in both on- and off-trade businesses”, Clini added.
Clini added the Group has set aside a capital expenditure of RM110 million to modernise its production facilities, which is expected to be completed by end of this year. It is a massive upgrade and the biggest investment of the Group in thirty years. This is to improve the filling capacity and enable greater flexibility in packaging options, higher automation, a more conducive working environment as well as greater sustainability performance in energy, water and waste management.
