Heineken 1Q earnings rise on festive campaign, better commercial spend

PETALING JAYA: Heineken Malaysia Bhd’s net profit rose by 7.9% to RM56.96 million in its first quarter ended March 31, against RM52.81 million reported in the same period the previous year due to effective Chinese New Year campaigns executed in January and February, ahead of the price adjustment implemented on selected products effective March, as well as the more efficient commercial spend during the quarter.

Revenue for the period stood at RM515.89 million, a 1.8% decline from RM525.14 million reported previously, mainly due to lower sales in March 2020 which registered a 50% drop following the temporary suspension of operations of Sungei Way brewery.

Net cash from operating activities as at March 31, 2020 dropped significantly, and reduced 44% to approximately RM53 million (2019 Q1: RM94 million) following the suspension of business operations to comply with the movement control order.

Managing director Roland Bala said the Covid-19 pandemic will continue to pose major challenges to business.

“Our top 3 priorities are ensuring the health, safety and well-being of our people, ensuring business continuity and preserving cash,” he said in a release.

Moving forward, Heineken stated it will align its commercial strategies to adapt to the new reality, and keep a very tight rein on its cost base, which should ensure the group is well placed when economic activities normalise and the industry recovers.

To that effect, various initiatives have been implemented to accelerate business activities and improve operational efficiency to protect the group profitability and preserve cash.

These include optimising working capital management and utilising borrowing facilities to ensure the ongoing

liquidity of the group, acceleration of e-commerce channel and digital campaigns, and a revision of commercial and marketing spend.