Malaysia: Carlsberg Brewery Malaysia reports improved Q3 thanks to easing of movement restrictions in Malaysia, Singapore, and Sri Lanka

Carlsberg Brewery Malaysia Bhd reported a net profit of RM40.63 million for the third quarter ended Sept 30, 2020 (3QFY20), about three times the RM10.65 million it made in 2QFY20 as the brewer's sales rebound following the easing of movement restrictions in Malaysia, Singapore and Sri Lanka, where it operates, The Edge Markets reported on November 12.

Revenue for 3QFY20 grew 51.5% quarter-on-quarter to RM435.3 million from RM287.27 million.

"These improvements were the result of slow but promising recovery in the on-trade sector plus several cost control measures as the group reset its businesses," Carlsberg said in a statement.

Still, the group's 3QFY20 net profit is 41.3% lower than the RM69.18 million it made in the corresponding quarter last year as revenue declined 19.7% from the RM542.22 million it recorded at the time.

And for the nine months ended Sept 30, (9MFY20) Carlsberg's cumulative net profit is still down by 44% to RM124.23 million compared with the RM222.03 million it recorded in 9MFY19, no thanks to the pandemic's impact, while cumulative revenue declined 22% to RM1.31 billion from RM1.68 billion.

Carlsberg managing director Steano Clini noted in the statement that the group's improved 3QFY20 came as the group re-focused on its off-trade and e-commerce segments, which resulted in increased sales from these channels, boosted by the Carlsberg Liverpool FC Champions promotion.

But as the group entered the fourth quarter, Clini said the recent spike in COVID-19 cases and the subsequent stricter lockdown measures imposed in most States in Malaysia have taken another toll on the group’s on trade consumption, which was n on the path towards fragile recovery in 3QFY20.

“In these uncertain times, we will continue to focus on our strategic priorities while working closely with our business partners and distributors to be highly agile and adaptable within a volatile operating environment.

“Economic and business recovery will be slow under the threat of the ongoing pandemic and we remain focused on the health and safety of our employees and customers while ensuring the sustainability of our operations in the short and long terms,” Clini added.

The group's decision to suspend its quarterly dividend payout for FY20 also remains.

Separately, Clini applauded the Malaysian government for not increasing excise duties on beer during the recent Budget 2021 announcement, saying any increase will further incentivise illicit trade while making legitimate beer less affordable for consumers, and hurt local retailers and food and beverage (F&B) operators who are struggling to stay afloat.

Carlsberg shares jumped 74 sen or 3.29% to settle at RM23.24 on November 12 — its highest in almost three months — which gave the brewer a market capitalisation of RM7.11 billion, after 815,800 shares were traded.

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