Malaysia: Carlsberg Brewery Malaysias Q1 profit up 7%
Carlsberg Brewery Malaysia Bhd's net profit for the first quarter of the financial year 2017 grew 7%, thanks to improved sales in both Malaysia and Singapore, The Edge reported on May 17.
Net profit for the quarter ended March 31, 2017 (1QFY17) strengthened to RM67.39 million from RM62.94 million a year ago, while revenue grew 10% to RM502.64 million from RM455.72 million, its Bursa Malaysia filing showed on May 17.
Notably, its Malaysian operations' profitability improved not just due to higher sales, but also because of the price increase in response to duty increases in March last year, and effective cost management, said Carlsberg.
"The satisfactory result was driven by higher sales and efficiencies in line with the Group's SAIL'22 strategy," said Carlsberg in a separate statement.
However, the improvement was dragged by a higher share of loss of RM5.9 million from its associate company Lion Brewery (Ceylon) PLC in Sri Lanka, primarily due to an impairment loss on one of its brands, Miller Brewery Ltd.
"Discounting the Lion Brewery loss, the group registered an organic growth in its net profit by 14.3%," Carlsberg said.
"We are pleased to deliver a solid growth in revenue and profit for our businesses in Malaysia and Singapore. It is a testament that we are on-track with the implementation of our SAIL'22 strategic priorities," said Carlsberg's managing director Lars Lehmann.
Lehmann noted that its latest innovative product, Carlsberg Smooth Draught, which delivers the smooth sensation of a freshly tapped draught beer, was very well-received by consumers, especially for home consumption, during the Chinese New Year festive period.
"Our Somersby cider, with its winning fruity taste, continued its double-digit growth. We are also pleased to see high growth of our premium brand Kronenbourg 1664 as well as Connor's Stout Porter in draught. The 'Fund the Journey' programme keeps delivering the targeted cost reductions and efficiencies improvement across the business," he added.
However, on outlook, Carlsberg said it remains challenging due to weak consumer sentiment in Malaysia and Singapore as well as the influx of contraband brands in Malaysia.
Despite the unfavourable headwinds, the group is committed to execute its SAIL'22 strategic priorities in Malaysia and Singapore, and is confident of meeting the challenges to deliver a satisfactory performance, it added.
Carlsberg shares settled unchanged at RM14.80 on May 17, giving it a market capitalisation of RM4.56 billion.
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