Thursday 28 Mar 2024
By
main news image

KUALA LUMPUR (May 29): Carlsberg Malaysia Bhd's earnings fell 16.7% in the first quarter of its financial year 2020 from the corresponding quarter a year ago, following the Covid-19 outbreak that affected its sales and the resultant containment efforts that saw the suspension of its operations.

Its net profit for the three months ended March 31 (1QFY20) declined to RM72.96 million from RM87.60 million, while revenue dropped 10.6% to RM589.87 million from RM659.92 million.

Consequently, the group's quarterly earnings per share retreated to 23.9 sen from 28.7 sen.  

"Both revenues and net profit were impacted by the Covid-19 and movement control order (MCO) as operations were suspended and on-trade sales were affected in both Malaysia and Singapore," it said in a statement.

Unlike in 1QFY19 — when it declared a 21.50 sen dividend — Carlsberg did not declare any dividend this time around.

Given the unprecedented impact and levels of uncertainty and volatility globally stemming from the Covid-19 pandemic, it said its board of directors has decided to suspend the quarterly dividend payments for the financial year ending Dec 31, 2020 to ensure a more prudent focus on preserving cash and liquidity, and with the intent to strike a balance between the long-term health of the organisation and dividends to shareholders.

“The impact of Covid-19 in Malaysia and Singapore has generated a high degree of volatility and uncertainty. Hence, we believe it is a sound and timely call to suspend the quarterly dividend payments to ensure the group is financially and commercially healthy.

"The board has previously stated the group’s dividend policy is dependent on business prospects, capital requirements, expansion strategy and other relevant factors. We will revisit the policy later in the year when the landscape becomes clearer,” Carlsberg's managing director Stefano Clini further explained.

The group's revenue from its Malaysian operations fell 11.3% in 1QFY20, while profit from ops dropped 18.3% to RM74.2 million. It said this is due mainly to an earlier Chinese New Year (CNY) trade loading in December 2019, the absence of trade loading in March this year, and lower sales following the MCO that started on March 18.

As for its Singapore business, revenue fell 8.6% to RM144.5 million and profit from ops sank to RM17.7 million. On the other hand, the group registered a higher share of profit from its Sri Lankan associate company Lion Brewery (Ceylon) PLC of RM5.1 million, compared with RM4.7 million previously.

Going forward, Clini said the pandemic outbreak, which has severely impacted the group's operations in Malaysia and Singapore, and its investment in Sri Lanka, will inevitably have an adverse impact on its business and financial performance in 2020.

"The regulations set during the conditional MCO in Malaysia and the circuit breaker in Singapore took a heavy toll on on-trade sales and consumer sentiment.

"Though many eateries and restaurants have reopened with dine-in whilst observing social distancing and other health and safety guidelines, we anticipate a slow recovery in on-trade due to reduced capacity and shorter operating hours thus affecting consumer consumption in the coming months and deteriorating macroeconomic conditions,” he added.  

Shares in Carlsberg finished 9.89% or RM2.60 higher at RM28.88 today, giving the group a market capitalisation of RM8.83 billion. The stock is up almost 22% from a year ago. 

      Print
      Text Size
      Share