Carlsberg brews up 62% increase in Q2 net profit

PETALING JAYA: Carlsberg Brewery Malaysia Bhd's second quarter net profit jumped 62% to RM51.3 million from RM31.7 million in the same quarter last year.
The group's profit from operations rose by 54.5% to RM66.8 million in the second quarter.
"Adjusted for the LHFB (Luen Heng F&B Sdn Bhd stake) divestment, the operating profit for the quarter grew by 16.3%. This was attributed to robust efficiency initiatives as part of the Carlsberg Group's Funding the Journey," Carlsberg said in a filing with Bursa Malaysia.
The group achieved an organic revenue growth of 6.3% to RM395.8 million in the quarter ended June 30, 2016. Earnings per share was 37.38 sen compared with 25.82 sen year-on-year.
The group announced a single-tier interim dividend of 5 sen per ordinary share of 50 sen for the financial year ending Dec 31, 2016.
"The group has recorded a satisfactory and solid organic profit after tax, especially considering the substantial increase in excise duties," its managing director Lars Lehmann said.
"Both the Malaysia and Singapore operations continued to deliver organic growth in revenue. The nationwide rollout of Carlsberg Smooth Draught, successful activation of the Carlsberg EURO 2016™ campaign and local production of Somersby Apple Cider have contributed positively to the bottom line. We are also pleased to see our premium brands continue to grow and gain share in both Malaysia and Singapore" he added.
The brewer took a hit on the sales of its strong beer and stout brands from the new excise duties structure.
To ensure that these products remained affordable, the group slightly adjusted the alcohol strength of Carlsberg Special Brew to 6.5%, Royal Stout to 6.8% and SKOL Super to 7.8% while keeping taste profile unchanged.
"It is very unfortunate that our investment in Lion Brewery (Ceylon) Ltd, Sri Lanka (LBCL), is negatively affected by the disastrous flooding of the brewery in May. Local production is expected to resume November this year. During this period, LBCL imports beers from other Carlsberg Group breweries to keep servicing their customers," Lehmann said.
"The aggressive excise tax increase on March 1 has dampened our outlook for the year. However, we will continue to strengthen the efficiency of our Malaysian and Singapore operations and reinvesting in our key brands", he added.
The brewer urged the government not to impose any increase on excise duties in Budget 2017 to be tabled in October this year. It said further increases will lead to increased influx of contraband imported beers, which is already a huge problem today.