Carlsberg earnings hit by trade offer adjustments in Singapore

PETALING JAYA: Carlsberg Brewery Malaysia Bhd’s net profit for the third quarter ended Sept 30, 2017 fell 1.75% to RM42.85 million from RM43.61 million a year ago due to trade offer adjustments by its subsidiary Carlsberg Singapore Pte Ltd.
The group told Bursa Malaysia that the adjustments in Singapore relate to provisions for trade offers amounting to RM18.2 million, of which RM14.2 million relates to prior years.
After excluding trade offer adjustments, the group’s organic net profit grew 19.8% to RM54.7 million driven by strong performance in Malaysian operations.
Revenue for the quarter rose 7.68% to RM423.51 million from RM393.31 million a year ago due to higher sales volumes.
In Malaysia, the total external revenue rose 17.9% year-on-year driven by higher sales of the group’s flagship brand Carlsberg Green Label and Carlsberg Smooth Draught.
Premium brands like Kronenbourg 1664 Blanc, Somersby Cider and Connor’s Stout Porter continued to deliver double-digit growth in sales. Profit from operations grew 47.9% due to better product mix and effective cost management.
In Singapore, revenue fell 8.9% while profit from operations plunged 83.5% due to the trade offer adjustments.
The group registered a share of profit from its associate company in Sri Lanka, Lion Brewery (Ceylon) PLC of RM600,000 during the quarter compared with a share of loss of RM1.7 million a year ago due to the floods in May 2016.
Profit in the associate company improved by RM2.3 million due to the recovery in its operational performance.
For the nine months ended Sept 30, 2017, net profit rose 8.39% to RM171.16 million from RM157.91 million a year ago while revenue rose 7.51% to RM1.34 billion from RM1.24 billion a year ago.
Managing director Lars Lehmann said it is optimistic about the remaining quarter in Malaysia, where the launch of Carlsberg Smooth Draught in 325ml pint bottle increased the availability of the brand.
“We celebrate Carlsberg’s 25 years of sponsorship of Liverpool FC and launch Somersby Sparkling Rose as limited-edition cider for the festive season. We will also import and sell a famous US craft beer from December onwards,” he said in a statement today.
In a separate filing, the group announced the appointment of Michelle Tanya Achuthan as an independent non-executive director effective today.
Michelle, 46, is currently the managing director of MEC Malaysia, a GroupM agency and has 27 years experience in advertising.
Carlsberg’s share price rose 36 sen or 2.43% to close at RM15.16 with a total of 113,100 shares traded.