Heineken remains resilient, 9-month net profit up 50%

PETALING JAYA: Heineken Malaysia Bhd, whose net profit increased 50% to RM149.9 million in the first nine months of 2021, is hopeful that further relaxation of the restrictions and opening of the tourism sector will accelerate the recovery of the food & beverage sector and will improve the group’s performance in the fourth quarter.

“The group will continue to navigate this challenging external environment by adapting to the new market reality, ensuring the safety of our people, keeping a tight rein on cost and staying focused on our strategy to accelerate our business recovery,“ it said in a statement yesterday following the release of its third quarter financial results.

Heineken’s net profit declined 17% to RM51.02 million for the third quarter ended Sept 30, 2021 from RM61.25 million in the same quarter of the previous year as sales were adversely affected by the continued suspension of the brewery’s operations which lasted until Aug 15, 2021 in line with the full lockdown imposed by the government on June 1, 2021. Revenue for the quarter fell 18% to RM389.8 million from RM473.8 million previously.

For the nine months, the group’s net profit increased 50% to RM149.83 million from RM100 million in the corresponding period of the previous year principally due to revenue growth, effective allocation of marketing investment, right-sizing of organisation and cost base, faster adoption of digitalisation, and the absence of the one-off settlement of the Customs’ Bills of Demand of RM7.2 million incurred in June 2020. Revenue increased 4% to RM1.29 billion from RM1.24 billion previously mainly due to better revenue management and higher in-home consumption as business and economic activities started to recover.

Heineken Malaysia managing director Roland Bala said the group welcomed the government to not increase excise duties on beer in Budget 2022, as any hike in excise rates will further fuel illicit alcohol demand.

“Malaysia’s excise rate for beer and stout ranks second highest in the world. Illegal trade and smuggling have caused the government to incur huge tax revenue losses, disrupted legitimate businesses, and risked exposing more consumers to cheaper, unregulated illicit alcohol,“ he said.

The company participated in the government’s vaccination programme to ensure 100% of its brewery’s essential workforce are vaccinated.