This article first appeared in The Edge Financial Daily on May 17, 2019

KUALA LUMPUR: Carlsberg Brewery Malaysia Bhd reported an 8.4% rise in net profit for the first quarter ended March 31, 2019 (1QFY19), thanks to higher sales recorded for both its Malaysian and Singaporean operations during the Chinese New Year (CNY) festive period, which boosted earnings.

Net profit for 1QFY19 climbed to RM87.6 million from RM80.82 million a year ago, as revenue grew 20.3% to RM659.92 million from RM548.47 million, its stock exchange filing showed yesterday.

The stronger 1Q lifted earnings per share for the quarter to 28.65 sen from 26.43 sen previously. The group declared a first interim dividend of 21.5 sen per share — representing a 75% payout of its consolidated net profit for 1QFY19 — to be paid on July 31.

Revenue of its Malaysian business grew 23.7% to RM501.9 million for 1QFY19, while profit from operations grew 10.2% to RM90.9 million. Stripping the effects of the change from the goods and services tax regime to the sales and services tax, organic revenue of its business here grew 16%, Carlsberg said.

Its Singapore business, meanwhile, recorded a 10.7% rise in revenue to RM158.1 million, with a 16.3% rise in profit from operations to RM20.7 million.

The only decline was seen in its share of profit from its Sri Lankan associate, Lion Brewery (Ceylon) PLC, which fell 16.1% to RM4.7 million from RM5.6 million for the same quarter last year, because its 1QFY18 results recognised a final insurance compensation settlement of RM4.7 million relating to floods in 2016.

To newly appointed Carlsberg managing director Ted Akiskalos, the 1QFY19 report card was “very satisfactory”, and was a continuation of the group’s “strong track record” of growing its revenue and net profit for shareholders.

The group expects consumer sentiment in Malaysia to remain dampened in 2019 amid uncertainty over the macroeconomic situation. The smoking ban implemented at the start of the year has also had, “and will continue to have”, a negative impact on beer consumption, it said.

In Singapore, the anticipated introduction of the European Union-Singapore Free Trade Agreement in the fourth quarter of 2019 will pose a further challenge from cheaper imports, it noted.

In spite of the challenges ahead, the group said it will continue to focus on innovation and promotions, and to keep its costs under control to deliver a satisfactory FY19.