Malaysia: Carlsberg Brewery Malaysia posts 6% increase in Q4 profit

Carlsberg Brewery Malaysia Bhd, whose share price closed at a record high of RM16.66 on February 14, posted a 6% year-on-year rise in its fourth quarter profit and announced a 77 sen dividend payout, comprising a final dividend of 66 sen and a special portion of 11 sen, The Edge Markets reported.

The stronger profit for the quarter ended Dec 31, 2017 of RM50.01 million — compared with RM47.07 million a year ago — was mainly due to the continued recovery of its associate's business in Sri Lanka, Carlsberg's Bursa Malaysia filing showed.

Its quarterly revenue, however, declined 1% y-o-y to RM429.94 million from RM434.64 million.

For the full FY17, Carlsberg Malaysia posted an 8% rise in net profit to RM221.17 million from RM204.98 million in FY16, while revenue grew 5% to RM1.77 billion from RM1.68 billion.

In a statement, Carlsberg said the stronger FY17 earnings were mainly driven by higher sales and premiumisation in the Malaysia operations, good cost control as well as improved results in Lion Brewery (Ceylon) PLC (LBCP), which was offset by trade offer adjustments in Carlsberg Singapore Pte Ltd.

In a statement, Carlsberg Malaysia managing director Lars Lehmann said 2017 was a "satisfactory" year for the group despite the "regrettable" RM17.2 million trade offer adjustments in Carlsberg Singapore Pte Ltd related to prior years.

Lehmann also announced that the group will adopt a dividend policy targeting a 100% payout of the group’s consolidated net profit, subject to business prospects, capital requirements, expansion strategy and other factors considered relevant by the board.

“It is also our intent to declare interim dividends on quarterly basis, where the target payout is at least 75% of the group’s quarterly consolidated net profit with the remaining dividend declared in the last quarter. The board may also consider a special dividend in the event of surplus cash after considering the future cash requirements of the group,” he said.

Moving forward, Carlsberg Malaysia's filing wrote that overall consumer sentiments remain relatively soft and the macro economic situation is not expected to change in either Malaysia or Singapore in 2018.

“In Singapore, the introduction of the European Free Trade Agreement by mid-2018 will pose a further challenge from cheaper imports. In Malaysia, the more effective efforts by the Malaysian authorities to curb contraband beer is showing progress in the strengthening of the legitimate tax-paying beer market,” it added.

Nevertheless, Carlsberg Malaysia said it has enjoyed solid growth from its flagship brand as well as its premium brands in FY17, and expects this momentum to continue in FY18.

Carlsberg Malaysia’s share price gained 18 sen or 1.09% to close at RM16.66 on February 14, giving it a market capitalisation of RM5.13 billion.

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