Malaysia: Heineken Malaysia’s Q1 net profit falls by marginal 0.44%

Heineken Malaysia Bhd's net profit fell by a marginal 0.44% to RM48.76 million in the first quarter ended March 31, 2018 (1QFY18) from RM48.97 million a year ago, owing to higher promotion costs and timing differences of commercial expenses, The Edge Markets reported on May 11.

"Furthermore, trade partners delayed purchases to early April in anticipation of the announced price adjustment, which took effect on April 15," Heineken Malaysia said in a filing with Bursa Malaysia.

This resulted in a lower earnings per share of 16.14 sen in 1QFY18 compared with 16.21 sen in 1QFY17.

Quarterly revenue, however, grew 10.5% to RM433.81 million in 1QFY18 from RM392.6 million a year ago, which Heineken Malaysia attributed to higher sales volume from effective execution of commercial campaigns for the festive period, which resulted from a sharpened focus across the organisation to support the group’s growth ambition.

In a separate statement, Heineken Malaysia managing director Hans Essaadi said the later Chinese New Year, which provided for a slightly longer selling period, enabled the group to capitalise on extending its promotions led by Tiger.

On prospects, Heineken Malaysia said it is cautiously optimistic of delivering a commendable performance in 2018 through implementation of key strategies and cost savings initiatives to drive improvement in operational efficiencies and effectiveness.

"The group continues to remain concerned over the threat of a significant contraband market," it added.

“The existence of a large contraband market will continue to impact our business and the overall economy. That said, we appreciate the Royal Malaysian Customs Department’s proactive stance to address the contraband issue in the country through stronger enforcement. Our support towards the relevant authorities remains steadfast, and we will continue to assist in all efforts to combat illegal trade through holistic initiatives that include education and outreach to both traders and consumers,” said Essaadi.

Heineken Malaysia shares closed down 28 sen or 1.37% at RM20.18 on May 8, bringing it a market capitalisation of RM6.1 billion.