Greetings, fellow investors and market watchers! Today, we’re diving deep into the latest financial performance of Carlsberg Brewery Malaysia Berhad (Carlsberg Malaysia) for the first quarter ended 31 March 2025 (Q1FY25). While the headline might suggest a dip in revenue, a closer look reveals a story of resilience and strategic maneuvering, culminating in a commendable increase in net profit and a delightful dividend announcement. Let’s unpack the numbers and understand what’s brewing at Carlsberg Malaysia.
Key Takeaways from Q1FY25:
- Despite an 8.7% decline in Group revenue to RM662.8 million, net profit impressively grew by 7.5% to RM94.5 million.
- Earnings per share (EPS) rose to 30.91 sen from 28.76 sen in Q1FY24.
- A first interim dividend of 23 sen per share has been announced, up from 22 sen in the same period last year.
Unpacking the Financial Performance
Carlsberg Malaysia’s Q1FY25 results present an interesting dynamic. While overall revenue saw a decline, the Group managed to bolster its bottom line, showcasing effective cost management and other contributing factors. Let’s break down the key figures:
Revenue Performance: A Shorter Festive Season Impact
The Group reported a revenue of RM662.8 million for Q1FY25, an 8.7% decrease compared to RM725.8 million in Q1FY24. This decline was primarily attributed to the shorter Chinese New Year (CNY) timing, with some festive sales having already been captured in December 2024. Additionally, a higher base was recorded in Q1FY24 due to additional trade purchases made in anticipation of a price increase in April 2024.
Q1FY25 Revenue
Group: RM662.8 million
Malaysia: RM494.6 million
Singapore: RM168.2 million
Q1FY24 Revenue
Group: RM725.8 million
Malaysia: RM541.4 million
Singapore: RM184.4 million
Profitability: A Strong Net Profit Despite Operational Dip
Despite the revenue challenges, the Group’s net profit surged by 7.5% to RM94.5 million, up from RM87.9 million in Q1FY24. This notable improvement was primarily due to the absence of additional deferred tax liabilities from foreign withholding tax in the Group’s Sri Lankan-based associate company, Lion Brewery (Ceylon) PLC (LBCP), which was recognized in Q1FY24.
However, Group profit from operations saw a slight dip of 3.6% to RM116.7 million. This was mainly driven by a significant decline in Singapore’s operational profit, which was partially offset by a modest growth in Malaysia’s operational profit.
Q1FY25 Profit from Operations
Group: RM116.7 million
Malaysia: RM106.3 million (Growth of 1.4%)
Singapore: RM10.4 million (Decline of 36.1%)
Q1FY24 Profit from Operations
Group: RM121.1 million
Malaysia: RM104.8 million
Singapore: RM16.2 million
Earnings Per Share (EPS) and Dividends Per Share (DPS)
The Group’s earnings per share for Q1FY25 stood at 30.91 sen, a healthy increase from 28.76 sen in Q1FY24. Reflecting this positive net profit performance and commitment to shareholder returns, the Board of Directors announced a first interim dividend of 23 sen per share, a slight increase from 22 sen per share in the same quarter last year.
Navigating Challenges and Charting the Future
Carlsberg Malaysia’s Managing Director, Stefano Clini, acknowledged the challenging macroeconomic environment and subdued consumer spending. Despite these headwinds, the company delivered a solid first quarter, demonstrating its agility and responsiveness to market dynamics.
Strategic Focus: Accelerate Premium
The Group remains committed to its “Accelerate Premium” strategy. This involves enhancing premium brands, strengthening customer and consumer engagement, and driving sustainable value creation through differentiated offerings. Recent initiatives include:
- The third consecutive Chinese New Year-themed ‘Brewing Prosperity Together’ artist-edition packaging in Malaysia and Singapore.
- The ‘Raikan Kebanggaan Sabah & Sarawak’ campaign featuring designs by East Malaysian artists.
- The #BestWithCarlsberg football-themed consumer promotions in Peninsular Malaysia.
- Reintroduction of Somersby Mandarin Orange 0.0 for CNY.
- St. Patrick’s Day celebration with Connor’s Stout Porter.
- Planned return of the 1664 Bon Appétit-lah campaign in June.
Addressing Macroeconomic Headwinds
Carlsberg Malaysia is mindful of the prolonged soft consumer sentiment and its impact on purchasing power. To mitigate these challenges and sustain growth, the Group will continue to focus on:
- Cost optimisation: To support strategic investments.
- Brand premiumisation: Enhancing the value and appeal of its premium offerings.
- Product innovation: Introducing new and exciting products to the market.
- Digital transformation: Leveraging technology to improve efficiency and consumer engagement.
Summary and Outlook
Carlsberg Malaysia’s Q1FY25 report paints a picture of a company adept at navigating a complex market. While revenue was impacted by specific timing issues and a high base, the significant increase in net profit and EPS, coupled with a higher dividend payout, underscores the company’s operational efficiency and financial discipline. The focus on premiumisation, innovation, and cost optimisation positions the Group to face ongoing macroeconomic uncertainties.
Key points from the report that stand out are:
- Resilient net profit growth despite revenue decline, largely aided by tax considerations.
- Strategic emphasis on premium brands and consumer engagement to drive future value.
- Proactive measures in cost optimisation and digital transformation to counter market headwinds.
The company’s commitment to delivering sustainable value for shareholders and stakeholders remains strong. It will be interesting to observe how their strategic initiatives unfold in the coming quarters amidst the dynamic consumer landscape.
What are your thoughts on Carlsberg Malaysia’s Q1FY25 performance? Do you think their “Accelerate Premium” strategy and cost optimisation efforts will be enough to sustain growth in a challenging environment? Share your perspectives in the comments below!
