This article first appeared in The Edge Financial Daily on May 24, 2019

KUALA LUMPUR: Heineken Malaysia Bhd’s net profit for its first quarter ended March 31, 2019 (1QFY19) rose 8.3% to RM52.81 million from RM48.76 million a year ago, on higher sales.

Revenue surged 21.1% to RM525.14 million from RM433.81 million in 1QFY18, mainly driven by higher sales from the effective execution of commercial campaigns during Chinese New Year, as well as the increase in sales revenue, prior to a price adjustment on April 1.

The increased sales, as well as efficient management of commercial spending, helped Heineken achieve better profitability, the group said in its filing with Bursa Malaysia yesterday.

Heineken said it will leverage on its solid 1Q growth and continue to focus on executing the right strategies for its brands, as well as on driving operational efficiency to deliver satisfactory performance this year, while being cautious about softening consumer sentiment and intensifying competition.

In a statement, managing director, Roland Bala, said the group has kept price increase to a minimum, and pointed out that it has not increased the prices of some of its products.

He said the price increase in April was necessary due to higher costs of packaging and raw materials, following increased global commodity prices.

“We are mindful of the challenging market conditions and that the Consumers Sentiment Index fell further below the confidence threshold of 85.6 in 1Q.

“On a positive front, I take this opportunity to thank the government and the Customs Department for their efforts in intensifying enforcement to clamp down on illicit alcohol, as this represents revenue leakages to both the government, as well as the beer industry.

“We have witnessed positive results from enforcement actions and will continue to work closely with relevant authorities in support of their initiatives to address this issue,” Bala added.

Shares in Heineken closed eight sen or 0.34% lower at RM23.70 yesterday, with a market capitalisation of RM7.16 billion.