Malaysia: Carlsberg Brewery Malaysia reports 56.41% decline in third-quarter net profit

Carlsberg Brewery Malaysia Bhd said its third-quarter net profit fell 56.41% to RM25.98 million, from RM40.63 million a year ago, in line with lower sales and compounded by unabsorbed fixed costs from the shutdown of its brewery, the Edge Markets reported on November 12.

Quarterly revenue slipped 24.63% to RM349.29 million from RM435.31 million as both its Malaysian and Singapore operations registered lower sales following the temporary suspension of brewery operations and the tightening of Covid-19 measures in both countries, the group said in a filing with Bursa Malaysia.

Carlsberg did not declare any dividend for the quarter ended Sept 30, 2021.

The group said its Malaysian sales revenue decreased by 24.8% to RM216.9 million primarily due to an 11-week brewery closure from June 2 to Aug 15.

“The on-trade performance was adversely impacted by dine-in restrictions during the period and continued closure of entertainments and bars outlets,” it said.

Sales revenue in Singapore also dropped by 9.8% to RM132.4 million due to the reimposition of lockdown measures triggered by emerging clusters of Covid-19.

Carlsberg's associated company Lion Brewery (Ceylon) PLC also posted a lower profit of RM2.9 million, compared to a share of profit of RM5.8 million for the previous year’s corresponding quarter, reflective of the differing lockdown environments in the respective periods.

On a quarter-on-quarter basis, Carlsberg's net profit was down 30.05% from RM37.14 million for the second quarter, while revenue was little changed from RM349.21 million.

For the nine months ended Sept 30, 2021, the group’s net profit grew 4.12% to RM129.57 million, from RM124.23 million a year earlier, while revenue slid 6.66% to RM1.23 billion from RM1.31 billion.

Looking ahead, the brewer remains cautious about the remainder of the financial year, given the continued closure of entertainment outlets and absence of international tourism throughout the National Recovery Plan period as well as commodity headwinds.

However, these should be mitigated by the gradual reopening of the local economy that now enables dine-ins and domestic travels nationwide, the group said.

“With lockdown restrictions being eased in both Malaysia and Singapore, we have set plans to launch new products in the coming weeks and will be rolling out exciting year end festive promotions to help speed up the recovery in both on- and off-trade [performances].

“Building on the growth momentum of our e-commerce sales in both markets, we have also enriched our online sales and expanded our footprint to generate positive revenue streams,” said Carlsberg managing director Stefano Clini.

Carlsberg's share price rose 44 sen or 2.08% to RM21.64 on November 12, valuing the group at RM6.57 billion.

Year to date, the counter was down 5.5%.

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