PETALING JAYA: Heineken Malaysia Bhd registered a net loss of RM18.2 million for the second quarter ended June 30, compared to a net profit of RM65.7 million reported for the previous corresponding quarter due to the decline in revenue, leading to a significant reduction in gross profit contributions, which was insufficient to offset fixed overheads.
Revenue for the quarter stood at RM253.74 million, a 50.5% decline from RM512.58 million reported previously, mainly due to the prolonged suspension of operations of the Sungei Way Brewery to comply with the movement control order enforced by the government.
“Despite the company resuming its operations and business during the conditional MCO, the group business performance particularly in the on-trade channel continue to be adversely impacted,” it said.
Heineken did not propose a dividend, as it has adopted a more prudent approach, but will reevaluate the situation at the end of the financial year.
In the group’s filing with the local bourse, it noted that with the commencement of the recovery MCO, it has seen a gradual improvement and normalisation of its business activity as almost all sectors are allowed to resume operations.
Nevertheless, it noted that outlets with liquor licences are still prohibited from operating whilst sales in on-trade outlets such as restaurants and coffee shops was slow due to shift in consumption patterns favouring takeout and at-home options amid public concern on the pandemic.
Heineken’s managing director, Roland Bala said that while the Covid-19 pandemic and the MCO have had a significant impact on its industry and business, in navigating the crisis, the group’s key priorities remain on the health and safety of its people, adapting the business to the new landscape and also prudent cost control to preserve cash.
Bala said the group’s operations had to close for about 46 days to comply with the MCO and subsequently, its results in the second quarter were severely affected.
“The exact impact of Covid-19 for the full year remains difficult to estimate as it will depend on the duration and the economic consequences of this crisis as well as the speed of recovery of the business,” he said.
In view of the challenging times ahead, Heineken stated it will continue to prioritise its recovery by accelerating commercial execution and improving operational efficiency through more stringent and prudent cost control measures to ensure liquidity and effective working capital management.
In the first half of 2020, the group posted a net profit of RM38.77 million, a 67.3% fall against a net profit of RM118.5 million in the same period of the previous year. Revenue for the period stood at RM769.63 million, a 25.8% drop from RM1.04 billion previously.
