Carlsberg shares hit by tax demands from Customs

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KUALA LUMPUR: Carlsberg Brewery (M) Bhd’s share price fell by 1.64% yesterday, after the brewer was slapped with excise duty, sales tax and penalty claims amounting to RM56.4 million.

Carlsberg closed at RM12, down 20 sen, making it the second top loser on Bursa Malaysia yesterday. The group has a market capitalisation of RM3.69 billion.

On Sept 19 it received two bills of demand from the Selangor state director of Royal Malaysian Customs. The state customs demanded excise duty amounting to RM35.7 million, sales tax amounting to RM13.76 million and a penalty amounting to RM6.88 million for the period from July 1, 2011 to Jan 14, 2014.

However, Carlsberg has refuted the liability on the demands and said it was seeking advice on the matter.

According to CIMB Research consumer analyst Eing Kar Mei, Carlsberg shares are likely to stay firm on their side. However, assuming Carlsberg recognises the claims by the customs, she sees the group’s full-year net profit may hit by as much as 25%.

“Assuming Carlsberg needs to pay the claims, operating costs will increase and inevitably net profit will be hit,” she told The Edge Financial Daily.

For now, Eing is maintaining her financial year 2014 (FY14) profit forecast and target price of RM10.64 pending further clarification on the matter. She also retained her “reduce” call for the stock.

Kenanga Research analyst Soong Wei Siang in a note yesterday said he was surprised by the bills of demand, which amounted to RM56.4 million over a period of 30 months.

Soong, at this point of time, is maintaining a “neutral” view on Carlsberg and left his earnings forecast intact. He also maintained his “market perform’ call on the stock with an unchanged target price of RM12.21.


This article first appeared in The Edge Financial Daily, on September 25, 2014.