PETALING JAYA: Heineken Malaysia Bhd, which reported improved 2021 performance, has not ruled out price increases for its products in 2022, given the rising cost of packaging materials around the globe.
Its finance director, Karsten Folkerts, said the brewer is closely monitoring the input cost situation as it is a global issue due to a spike in prices of packaging materials.
“We are trying to mitigate that by working closely with Heineken’s global procurement partners to ensure a continuity of supply but also to get the best price,” he said during Heineken Malaysia’s FY2021 results virtual briefing yesterday.
“In 2022, we will review whether there is a need to have another round of price increase and it is something we continuously monitor, in terms of the margin of our products but also the price sensitivity of those decisions.”
Folkerts outlined that the group places a lot of attention in balancing between the price and the volume of its products.
In 2021, the rising input cost resulted in a price increase by the brewer.
To demystify talk of a price increase that has been making the rounds on social media, Heineken Malaysia managing director Roland Bala pointed out that the quantum of the increase was to cover the rise in raw material cost.
“We will monitor it very closely as it is important for us to protect the long-term survival of the business,” he said.
With regard to the prospects of an on-trade channel recovery, Roland believes the government’s assurance that there will be no more nationwide lockdown is a good signal for businesses to normalise. He also sees the high vaccination rate as a pathway out of the Covid-19 crisis.
“Nonetheless, how the consumers behave will be another thing. While we try to accelerate our recovery in on-trade channels, at the same time we are glad to accelerate our digital journey.”
Heineken Malaysia’s net profit for the fourth quarter ended Dec 31, 2021 stood at RM95.85 million, a 76.9% jump from RM54.17 million in the same quarter of the previous year, mainly due to higher sales volume, driven by the easing of Covid-19 restrictions and earlier festive sell-in for Chinese New Year 2022.
Revenue for the quarter rose 33.4% to RM692.34 million from RM519.02 million previously.
For the full year, its net profit increased 59.3% to RM245.68 million from RM154.2 million in the previous year. Revenue for the year came in at RM1.98 billion, a 12.3% improvement over RM1.76 billion previously.
Heineken Malaysia has proposed a single-tier final dividend of 66 sen per stock unit for the year ended Dec 31, 2021, subject to the approval of shareholders at the forthcoming AGM. The total dividend for the year ended Dec 31, 2021 is 81 sen per stock unit .
On the results, Roland commented that the group’s courage to right-size its organisation and front-load its cost and value initiatives during the crisis has contributed significantly to the performance.
“Moving forward, we will continue to navigate the challenging external environment by adapting to the new market reality, ensuring the safety of our people, keeping a tight rein on costs and staying focused on our strategy to accelerate our business recovery.”
