KUALA LUMPUR (Aug 20): Carlsberg Brewery (M) Bhd’s revenue for 2Q2021 gained 21.6% to RM349.21 million from a year ago while its net profit increased more than three times to RM37.14 million from RM10.65 million in the previous year.

The increase in revenue comes as both Malaysia and Singapore operations saw better overall sales compared with the same quarter last year, noted the company.

Revenue from Malaysia increased by 17.1% to RM243.6 million as easing of the lockdown measures took place in the early part of the second quarter, but the recovery soon hit a roadblock when the Full Movement Control Order (FMCO) was imposed in June.

Singapore sales also improved to RM105.6 million, up 33.3%, as restrictions eased in the city-state.

Meanwhile, the group said the improvement in net profit was largely due to higher sales for the quarter and it was further boosted by a reduction in operating expenses as cost control measures were introduced.

Furthermore, there was also the absence of the one-off RM6.4 million bill of demand settlement paid in FY2020 to the Royal Malaysian Customs of Selangor.

Accordingly, earnings per share (EPS) rose to 12.15 sen from 3.48 sen.

For the cumulative six months ended June 30, 2021 (1H2021), revenue only inched up 0.5% to RM881.2 million from RM877.15 million in the previous year which it attributed to the suspension of operations of its breweries.

Notably, the revenue from its Malaysian operations for 1H2021, declined 8.2% to RM600.2 million while Singapore reported a 25.6% increase in revenue to RM281 million.

Overall net profit expanded at a faster pace than revenue by 23.9% to RM103.59 million from RM83.6 million previously. This was attributed to better sales, lower marketing spent, a reduction in operating expenses and the absence of the RM6.4 million bill of demand incurred in the previous financial year.

EPS increased to 33.88 sen from 27.34 sen a year ago.

Notably, the brewery was required to stop its operations under FMCO on June 2 and it had only just recently started operations on Aug 16.

The group said that the extended suspension of operations, the ongoing dine-in restrictions in the on-trade sector will continue to adversely impact the group’s revenue and profitability until more of the economy is open.

While the board remains focused on preserving cash and liquidity in the near to medium term, it said it has decided to declare an interim dividend of 10 sen per share on account of the “relatively reasonable” performance in 2Q2021.

It is worth noting that in the last three financial years, Carlsberg has paid out total dividends amounting to 100 sen in FY2018 and FY2019 respectively and 40 sen in FY2020.

In a press statement, managing director Stefano Clini highlighted that the 11-week suspension of operations was unprecedented in the history of the group and he believes that the effects of the suspension were only partially evident in 2Q2021.

This implies that 3Q2021 revenue and earnings will likely see the weight of the suspension in operations.

“The prolonged suspension in Malaysia has constituted a major impediment to the ability of the Group to carry on its normal business operations since June, including not being able to adequately satisfy domestic market demand, maintain its regular supply to the Singapore market, as well as meet export demand from regional and other foreign markets,” he added.

That said, with over 80% of its employees fully vaccinated, its operations have been allowed to operate at 100% capacity in Phase 1 and 2 since Aug 16.

The group added that it is hopeful that the government will not impose any further increases on excise duties in the upcoming 2022 Budget to lessen the burden of recovery on F&B businesses and retailers which rely on beer as an important source of income.

Carlsberg’s share price was up 1.67% to RM21.90 today, valuing the group at RM6.7 billion.