KUALA LUMPUR: Guinness Anchor Bhd (GAB) posted a 15.2% year-on-year rise in net profit for the second quarter ended Dec 31, 2014 (2QFY15) to RM76.1 million, mainly on higher revenue, and improved cost efficiencies and working capital management.
Revenue for the quarter was up 4.3% to RM520.8 million due to favourable pricing and brand mix.
GAB (fundamental: 1.9; valuation: 0.9) declared a single-tier interim dividend of 20 sen per share, payable on April 22.
For the six months ended Dec 31, 2014, GAB posted a 13% increase in net profit to RM130.7 million from RM115.7 million. Revenue also rose to RM913.9 million from RM825.2 million.
“After the decline in FY14, we are pleased to have accomplished a turnaround by delivering double-digit profit growth for two consecutive quarters in FY15.
“During difficult times, we continued to invest behind our core portfolio coupled with the introduction of new brands and line extensions, which has helped us deliver a strong set of results in FY15,” said GAB managing director Hans Essaadi in a statement yesterday.
New brand launches in 2014 such as Kirin Ichiban, Smirnoff Ice and Affligem, and three new Strongbow flavours have contributed to higher volume, said GAB.
On outlook, the group expected the external environment to be challenging in the second half of FY15, as a result of reduced expenditure by the government and uncertainties related to the roll-out of the goods and services tax (GST) in April.
At a media and analyst briefing yesterday, Essaadi said it is possible to see stronger sales growth in 3QFY15, followed by a slower 4Q due to the implementation of GST.
“However, we will try to normalise the conversation across all layers of the value chain to minimise the ‘drama’ from the GST,” he said.
Essaadi expects GAB sales will normalise in six months after the implementation of the consumption tax.
On pre-GST purchases, he said the impact on basic goods will be less compared with that on durable goods such as furniture, household appliances and cars.
GAB shares closed down 0.16% at RM12.20 yesterday, bringing a market capitalisation of RM3.69 billion.
This article first appeared in The Edge Financial Daily, on February 6, 2015.