Carlsberg confident of growth despite soft consumer sentiment

PETALING JAYA: Carlsberg Brewery Malaysia Bhd believes there are still growth prospects, despite softer consumer sentiments in Malaysia and Singapore.

Its managing director Lars Lehmann expects the market to be flat in terms of volume but believes that revenue generators, its premium range and Carlsberg Smooth Draught, in its mainstream range, will bolster sales growth.

Its premium range of products such as Kronenbourg blanc,Somersby Cider, Asahi and Connor’s Stout contributed about 20% of sales revenue in 2016.

The group achieved an organic growth of about 1.6% on the back of a flat market last year and Lehmann believes that it is possible to achieve revenue growth this year as well.

The group expects a single digit increase in operations expenditure due to the recent hike in excise duty while capital expenditure is expected to remain at about RM40 million.

“This year it will be higher, we got 10 months last year and this year it’s 12 months,” Lehmann said.

“The more you produce the more you pay,” he said, adding that the company has been cutting cost in other areas.

Last year, the Finance Ministry increased the excise duty of local brews by up to 150%.

A total of RM754 million was paid by Carlsberg in excise duty for products sold and brewed in both Malaysia and Singapore last year, 44.2% higher than the RM682 million in 2015.

Carlsberg’s Sri Lankan unit, Lion Brewery (Ceylon) PLC, which has not been in operations for several months due to floods, is on the road to recovery and is expected to be back on its feet by being profitable in the second quarter of this year.

It registered a net profit of RM204.98 million for the financial year ended Dec 31, 2016, on RM1.68 billion revenue.