Carlsberg Malaysia’s Q1 2025 Brew: A Closer Look at Revenue Dip and Profit Growth
As the first quarter of 2025 draws to a close, Malaysian investors are keen to see how their favourite consumer brands are faring. Today, we delve into the latest financial report from Carlsberg Brewery Malaysia Berhad, a household name in the beverage industry. This report offers a blend of challenges and resilience, showcasing a dip in revenue but a noteworthy increase in net profit, alongside a positive dividend announcement.
Carlsberg Malaysia continues to navigate a dynamic market landscape, and this report provides valuable insights into its strategic direction and operational performance. Let’s uncork the details and see what’s brewing for the company.
Unpacking the Core Financials: Q1 2025 Performance
Carlsberg Malaysia’s Q1 2025 financial performance presents a mixed picture. While revenue experienced a decline, the Group managed to deliver an increase in net profit, reflecting effective cost management and other financial factors. Here’s a breakdown of the key figures:
Overall Performance: Navigating Headwinds
Q1 2025
Revenue: RM662,811k
Profit from Operations: RM116,663k
Profit Attributable to Owners: RM94,517k
Basic Earnings Per Share: 30.91 sen
Q1 2024
Revenue: RM725,760k
Profit from Operations: RM121,082k
Profit Attributable to Owners: RM87,927k
Basic Earnings Per Share: 28.76 sen
The Group reported an 8.7% decrease in revenue, settling at RM662.8 million compared to RM725.8 million in the same quarter last year. This was primarily attributed to lower sales volumes, influenced by the earlier timing of Chinese New Year in 2025 and a higher comparative base in March 2024 due to additional trade purchases ahead of a price increase. Profit from operations also saw a 3.6% decrease to RM116.7 million.
However, despite these declines, the Group’s net profit for the quarter impressively increased by 7.5% to RM94.5 million. This positive divergence from operating profit was largely due to the recognition of additional deferred tax liabilities from foreign withholding tax in Lion Brewery (Ceylon) PLC (LBCP) in the same quarter last year, which inflated the tax expense in Q1 2024. Basic earnings per share also rose from 28.76 sen to 30.91 sen.
Segmental Review: Malaysia and Singapore
A closer look at the geographical segments reveals the nuances of performance:
| Segment | Q1 2025 Revenue (RM’000) | Q1 2024 Revenue (RM’000) | % Change (Revenue) | Q1 2025 Profit from Operations (RM’000) | Q1 2024 Profit from Operations (RM’000) | % Change (Profit from Operations) |
|---|---|---|---|---|---|---|
| Malaysia | 494,637 | 541,376 | -8.6% | 105,635 | 104,554 | +1.0% |
| Singapore | 168,174 | 184,384 | -8.8% | 10,382 | 16,239 | -36.1% |
Malaysia: Revenue decreased by 8.6% to RM494.6 million, mainly due to the earlier Chinese New Year and the higher base from last year’s pre-price increase purchases. Despite this, profit from operations remained marginally flat at RM106.3 million, thanks to lower operational spending compared to the same quarter last year.
Singapore: Revenue also saw an 8.8% decline to RM168.2 million, influenced by lower sales during the earlier festive period and the strengthening of the Ringgit Malaysia against the Singapore Dollar. Consequently, profit from operations in Singapore decreased significantly by 36.1% to RM10.4 million.
Financial Health: Balance Sheet and Cash Flow
The Group’s financial position remains robust. As at 31 March 2025, total assets stood at RM1,073.7 million, a slight decrease from RM1,133.4 million at 31 December 2024. Total equity attributable to owners of the Company saw a healthy increase to RM370.3 million from RM278.2 million, leading to an improved net assets per share of RM1.21 (from RM0.91).
A notable improvement was seen in the Group’s borrowings, which significantly reduced to RM1.74 million as of 31 March 2025, down from RM77.26 million at 31 December 2024. This reflects a strong focus on debt reduction.
Cash flow from operating activities was particularly strong, generating RM221.4 million compared to RM165.8 million in the same quarter last year. This robust cash generation contributed to a healthy increase in cash and cash equivalents, which rose to RM136.5 million from RM84.5 million at the beginning of the quarter.
Shareholder Returns: Dividends Declared
Carlsberg Malaysia continues its commitment to shareholder returns. The Board of Directors has declared a first interim single-tier dividend of 23.0 sen per share for the financial year ending 31 December 2025, payable in respect of the first quarter profits to 31 March 2025. This is an increase from the 22.0 sen per share declared in the same period last year.
Additionally, a final single-tier dividend of 35.0 sen per share for the financial year ended 31 December 2024 was approved at the Annual General Meeting on 7 May 2025, amounting to RM107.0 million, payable on 4 July 2025.
Risks and Prospects: Navigating the Future
Looking ahead, Carlsberg Malaysia acknowledges the challenging macroeconomic environment, marked by external headwinds and increased uncertainty, which could lead to prolonged soft consumer sentiment. This is a common theme across many industries in Malaysia, as inflationary pressures and global economic slowdowns impact purchasing power.
To address these challenges and ensure sustainable growth, the Group is committed to several key strategies:
- Cost Optimisation: A continued focus on efficiency and managing operational expenses to maintain profitability.
- Brand Premiumisation: Investing in and elevating its brand portfolio to capture higher-value segments.
- Product Innovation: Introducing new and exciting products to meet evolving consumer preferences and market trends.
- Digital Transformation: Leveraging technology to enhance operations, improve customer engagement, and drive business growth.
These strategies are designed to strengthen the Group’s market position, enhance its resilience against economic fluctuations, and continue delivering sustainable value for both shareholders and stakeholders.
Summary and
Carlsberg Brewery Malaysia Berhad’s Q1 2025 report demonstrates a company adept at navigating challenging market conditions. While revenue faced headwinds from seasonal factors and a high base, the Group successfully translated its operational efforts into a healthy increase in net profit, primarily through effective tax management and cost controls. The strong cash flow generation and significant reduction in borrowings underscore the company’s robust financial health.
The consistent commitment to shareholder returns through dividends further highlights the Group’s confidence in its financial stability and future prospects. As the company continues to focus on cost optimisation, brand premiumisation, product innovation, and digital transformation, it aims to build resilience against a soft consumer sentiment and external uncertainties.
Key points to consider from this report:
- Net profit growth despite revenue decline, largely driven by tax efficiencies.
- Strong cash generation from operations and significant reduction in borrowings.
- Continued commitment to shareholder returns through increased interim dividends.
- Strategic focus on cost optimisation and brand/product innovation to counter market challenges.
This report offers a transparent view of Carlsberg Malaysia’s current standing and its forward-looking strategies. Investors should consider these factors as they evaluate the company’s long-term potential.
What are your thoughts on Carlsberg Malaysia’s Q1 2025 performance? Do you think the company can maintain this growth momentum in net profit despite ongoing market challenges? Share your views in the comments section below!
