Carlsberg Malaysia profits hit by Sri Lanka floods and lower Singapore sales

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Carslberg Malaysia reports a net profit of RM204.9 million in 2016.

KUALA LUMPUR, 21 FEBRUARY, 2017 – Carlsberg Malaysia today reported a net profit of RM 204.9 million for the financial year ended 31 December, a 5% drop from  the previous year.

Adjusted for the share of loss from associated company Lion Brewery (Ceylon) PLC (LBCP), which was out of production for 7 months due to floods in Sri Lanka, the Group’s underlying net profit grew 5.1% to RM210 million. (2015: RM199.8 million after adjusting for share of profit from LBCP).

This was achieved on the back of an organic revenue growth of 5.7% for the Group, coupled with effective cost management.

Carlsberg Malaysia Managing Director Lars Lehmann (pic) said the Group is committed to deliver the strategic priorities underpinned by its new corporate strategy – SAIL’22 this year.

Despite the drop in reported net profits, the Group remains confident about the strong underlying profitability of the business.

Hence, it proposed a final and special single tier dividend of 67.0 sen per ordinary share.

Together with an interim dividend of 5 sen per ordinary share paid on 7 October 2016, total declared and proposed dividends for the 12 months ended 31 December 2016 amounted to 72.0 sen per ordinary share.

This maintains the dividend payment for 2015 and represents 104% of 2016 PAT.

Carlsberg Malaysia Managing Director Lars Lehmann said 2016 was a difficult year for the Group.

“Our results were severely impacted by the floods in Sri Lanka and the decline

of our strong beer after the excise duties increase in Malaysia. As well as lower sales in CSP and a one-off gain from brand incentive received last year.”

“On the positive front, we are proud of the strong growth of Carlsberg Smooth Draught as well as our premium brands Somersby cider, Kronenbourg 1664 Blanc, Asahi Super Dry and Connor’s Stout Porter”.

“Against the challenging conditions, we are pleased to achieve a modest organic growth for the Group and continue to deliver shareholder returns with a total declared and proposed dividend payment of 72.0 sen per ordinary share for year 2016”, Lehmann said.

“Our Fund the Journey program delivered higher supply chain efficiencies for the year and lower operating expenses at the organic level.

He said that however, the substantial increase in excise duties in March 2016 adversely affected the sales and profitability of the company’s strong beers.

“Over 9 months in 2016, we saw a 22% decline in sales of our strong beers,” Lehmann elaborated on the domestic performance.

In 2017, the Group is committed to deliver the strategic priorities underpinned by its new corporate strategy – SAIL’22.

Lehmann said Carlsberg Malaysia is reinvesting savings from its Fund the Journey program behind its great brand portfolios and consumer engagement activities to address the soft consumer sentiment and to deliver long term shareholder value.