Lower sales, writedown impact Carlsberg Q3 earnings

PETALING JAYA: Carlsberg Brewery Malaysia Bhd’s net profit fell 30% to RM43.61 million for the third quarter ended Sept 30, 2016 from RM62.50 million in the same period last year, impacted by the loss of sales and writedown of assets from associate company Lion Brewery (Ceylon) Ltd, Sri Lanka (LBCL) due to the disastrous floods in May and the divestment of Luen Heng F&B Sdn Bhd in August 2015.
Adjusted for the Luen Heng F&B divestment, revenue for the quarter was relatively flat at RM393.31 million compared with RM405.66 million a year ago, reflecting a softer market and lower sales of strong beers in Malaysia since the excise duty increase in March.
Carlsberg Malaysia group managing director Lars Lehmann said the group’s third quarter performance was negatively impacted by the floods in Sri Lanka. LBCL, of which the group owns 25%, had its production shut down since May and resumed production only on Nov 23, 2016.
Despite the lower performance recorded this quarter, the group’s net profit for the first nine months increased by 11.7% to RM157.91 million from RM141.43 million a year ago, on the back of a flat revenue growth, posting RM1.24 billion.
“Significantly, net cash generated from operating activities improved by RM100.5 million from better management of working capital. This demonstrates our solid underlying performance, which was mainly delivered by cost efficiencies and growth of our premium brands,” Lehmann said.
“We anticipate the remaining quarter to be challenging, partly due to the continued business disruption in LBCL, Sri Lanka until Nov 23 and weak Malaysian consumer sentiment. We will continue to execute our cost efficiency and value management initiatives.
"Our premium brands especially Somersby cider and Kronenbourg 1664 Blanc as well as our major innovation Carlsberg Smooth Draught will carry on the positive momentum in both Malaysia and Singapore,” he added.