Malaysia: Heineken Malaysia Bhd sees Q2 net profit increase by 19.7%

Heineken Malaysia Bhd's net profit for the second quarter ended June 30, 2019 (2QFY19) grew 19.7% year-on-year to RM65.7 million from RM54.9 million amidst higher beer sales, The Edge Markets reported on August 20.

There is more reason for Heineken shareholders to cheer as the brewery declares an interim dividend of 42 sen per share compared with 40 sen per share in the previous year.

The dividend will be paid to eligible shareholders on Oct 25, 2019 — with an entitlement date of Sept 26, 2019.

In a bourse filing, the brewery announced that its quarterly revenue expanded 21.6% to RM512.58 million from RM421.57 million in the previous corresponding quarter.

Earnings per share (EPS) expanded to 21.75 sen from 18.17 sen a year ago.

The group attributed its quarterly revenue growth to higher sales volume, which was driven by all of its core brands. If one were to exclude the impact of the sales and service tax, revenue grew by 15%.

Nonetheless, Heineken pointed out that its profit was partially impacted by higher commercial spending such as preparation for new products launch planned for 3QFY19.

Net profit increased by 14.3% to RM118.5 million for the six months ended June 30 (6MFY19) from RM103.66 million a year ago. Revenue for the period went up 21.32% to RM1.04 billion, from RM855.38 million last year.

Meanwhile, EPS climbed to 39.23 sen for 6MFY19 from 34.31 sen in the corresponding period in 2018.

The increase in 6MFY19 revenue was attributed to robust sales in the first quarter of 2019 (1Q19) and sustained growth in its core brands in 2QFY19.

In a statement, its managing director Roland Bala said the group's results have reflected its successful focus on growing its core brands and innovations that "have scale".

"Given the intense competition and the continued threat from contraband beer, the group is cautiously optimistic in what remains a challenging external environment and it expects consumer sentiment to stay below the optimism threshold impacted by rising cost of living.

"The group will continue to prioritise on strengthening its commercial execution across its route-to-market whilst sharpening the channel focus and accelerating growth of our innovation products," said Bala on Heineken Malaysia's prospects.

He pointed out that Heineken will support the government's efforts to eradicate the illicit alcohol market and raise awareness on the issue with relevant stakeholders.

Heineken's share price closed unchanged at RM22.72 today, giving it a market capitalisation of RM6.86 billion.

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