KUALA LUMPUR(May 13): Guinness Anchor Bhd (GAB) reported a 11% increase in its net profit for the third financial quarter ended March 31, 2015 (3QFY15) to RM39.46 million from RM35.56 million a year ago mainly due to improved cost efficiencies, and higher revenue.

In a filing with Bursa Malaysia today, GAB said that revenue had increased by 17.4% in 3QFY15 to RM437.33 million, from RM372.55 million in the same quarter a year ago, driven by the better performance in sales during the Chinese New Year period, as well as the effective deployment of the group’s sales strategy.

The group reported an earnings per share (EPS) of 13.06 sen for 3QFY15, from 11.77 sen in 3QFY14.

For its nine month period ended March 31, 2015 (9MFY15) GAB reported a net profit of RM170.17 million, which was 12.5% higher than its net profit of RM151.27 million in 9MFY14. However, it said the positive impact of cost efficiencies has been partly offset by higher excise duty and sales tax payments.

The group’s 9MFY15 revenue grew by 12.8% to RM1.35 billion, from RM1.2 billion in the same period a year ago, driven by volume growth, pricing and a favourable brand mix, as well as the enforcement measures carried out by the Royal Malaysian Customs against contraband beers.

Its 9MFY15 EPS was at 56.33 sen, from 50.07 sen in the same period a year ago.

GAB (fundamental: 1.7; valuation: 1.5) managing director Hans Essaadi said that the group is pleased to be able to achieve a healthy double digit profit growth despite a challenging environment.

“Our improved performance during this Chinese New Year period really attests to the growing appeal of our brands and the effectiveness of our sales strategy ... apart from that, it is also rewarding to see our new brands such as Kirin Ichiban, Smirnoff Ice and new Strongbow variants gaining loyalty from consumers in Malaysia,” he said in a statement today.

On the outlook for the group, Essadi said he expects the domestic beer business environment to remain challenging following the implementation of the goods and services tax, as consumers are likely to be cautious in their spending.

GAB share price has staged a rebound in February. The stock has climbed 21% from the recent low of RM12.20 to RM14.80 today, with a market capitalisation of RM4.48 billion.

(Note: The Edge Research's fundamental score reflects a company’s profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)