Malaysia: Carlsberg Brewery Malaysia hopeful of better prospects in the second half of 2021
Carlsberg Brewery Malaysia Bhd is hopeful of better prospects in the second half of 2021, arising from the vaccination rollouts in Malaysia and Singapore that will help contain infections, lift market sentiment, and lead to a stronger economic recovery, The Star reported on April 15.
Group managing director Stefano Clini said its outlook remains cautious due to the effects of the Covid-19 pandemic and government regulations, as well as measures that would likely cause on-trade sales and consumer sentiment to remain depressed.
We have put in place numerous measures to mitigate profit impact and preserve cash, We are even more disciplined in implementing our Fund the Journey initiatives and optimising cost structures aggressively to reallocate investments into viable channels and extend various support to our business partners, he added after the groups virtual AGM.
Meanwhile, in his address in the groups annual report 2020, chairman Datuk Toh Ah Wah said further prohibitions on the sale and availability of legitimate beers and stricter regulations on the food and beverage (F&B) industry would lead to an increase in illicit products, which would pose a threat to consumers well-being.
Toh pointed out that the Confederation of Malaysian Brewers Bhds estimates that 20% of the beer and stout market in the peninsula is illicit, and up to 80% in Sabah and Sarawak, resulting in significant losses in potential tax revenue.
For the financial year ended Dec 31,2020 (FY20), the group recorded a net profit of RM162.2mil from a revenue of RM1.79bil, lower by 44.3% and 20.9% respectively versus FY19, which was due primarily to the seven-week suspension of brewery operations in Malaysia and the closures and restrictions to on-trade businesses during the movement control order in Malaysia and the circuit breaker in Singapore.
Excluding a one-off RM6.4mil settlement with the Royal Malaysian Customs in June 2020 and restructuring costs of RM9.9mil to streamline cashflow and reset its business for a post-Covid-19 environment, organic net profit would have been RM174.6mil, a decline of 40%.
For FY20, the group declared a dividend of 40 sen per ordinary share, equivalent to a payment of RM122.3mil or 75.4% of its net profit.
The group said while total sales volume dropped in 2020 compared with 2019, the decline was offset by adapting to consumer shifts toward off-trade consumption and e-commerce complemented by virtual events and exclusive partnerships, consumer promotions, limited-time variants and festive packaging which drove brand loyalty as well as affinity.
Also, employees well-being was prioritised with a safe work environment through strict health and safety measures, no salary reductions throughout 2020, as well as virtual initiatives to drive a high-performing culture and keep employees engaged while working remotely.
Via its Safer Together campaign, the group set aside RM1.5mil for secure schooling environments, RM1.8mil to aid the recovery of coffee shop operators. It introduced two initiatives named Adopt a Keg and Bring Me Home to help on-trade operators affected by dine-in restrictions.
This was followed by the Cheers for Tomorrow campaign during the 2021 Chinese New Year festive period, with RM2mil in food and education aid benefitting 8,000 underprivileged Malaysians nationwide and 333 students with a one-off, interest-free education grant.
The group also made progress in its Together Towards ZERO sustainability ambitions with a 15% reduction in carbon footprint since 2015,10% reduction in water waste compared with 2019, new record of 721 consecutive days without lost-time accidents and sixth consecutive year of #CelebrateResponsibly campaign with new media and e-hailing partnerships promoting the if you drink, dont drive! message.
The brewer also recently launched the Carlsberg Apprenticeship Programme, to create employment opportunities for fresh graduates.
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