CCarlsberg Malaysia confident of sustaining profit margins
While the ringgit has strengthened and raw material costs have improved, the company remains optimistic about its outlook and confident of sustaining profit margins.
Declining to elaborate on the price adjustment, managing director Stefano Clini said macroeconomic challenges will continue to create uncertainty for sales and margin growth.
'Despite the challenges, the group remains optimistic that the recent OPR (Overnight Policy Rate) reduction, together with the government's ongoing fuel subsidy rationalisation, electricity tariff restructuring, lower interest rates, and targeted cash assistance, will help boost consumer confidence,' he said at a media briefing today.
Clini added that the company hopes there will be no excise duty hikes and trusts that the government is mindful of the industry's operating conditions.
Looking ahead, he said the group will continue navigating a challenging macroeconomic landscape marked by external headwinds and prolonged soft consumer sentiment. Cost optimisation will remain a key focus to support investments in brand premiumisation, product innovation, and digital transformation.
For the second quarter ended June 30, 2025 (Q2'25), net profit rose 3.18% to RM81.93 million from RM79.40 million a year ago. Revenue, however, fell 3.41% to RM490.17 million from RM507.48 million due to a shorter Chinese New Year period, which dampened sales.
Malaysian operations recorded higher revenue and operating profit, partly due to a lower base last year following trade purchases in March 2024 ahead of a price increase. In contrast, Singapore operations saw declines in revenue and profit, impacted by softer on-trade performance, intense pricing competition, cautious consumer sentiment, and subdued discretionary spending.
The group's Sri Lankan associate, Lion Brewery (Ceylon) PLC, posted a higher share of profit at RM9.1 million compared with RM8.3 million in Q2'24, supported by improved revenue.
Earnings per share for Q2'25 stood at 26.80 sen versus 25.97 sen a year ago. For the first half of FY25, net profit increased 5.4% to RM176.5 million from RM167.3 million, mainly due to the absence of additional deferred tax liabilities from foreign withholding tax for Lion Brewery recorded in the same period last year. Revenue for the period decreased 6.5% to RM1.15 billion from RM1.23 billion, also due to the shorter festive period, with some sales captured in December 2024.
Despite macroeconomic headwinds, Carlsberg Malaysia remains committed to sustaining profitability through strategic pricing, operational efficiency, and continued investment in premium brands and innovation.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
New Straits Times
16 hours ago
- New Straits Times
HLIB warns of rising regulatory risks for Carlsberg
KUALA LUMPUR: Carlsberg Brewery Malaysia Bhd's earnings outlook remains intact, but Hong Leong Investment Bank Bhd (HLIB) flagged rising regulatory risks from the extension of the pro-health tax to brewers and potential cigarette tax hikes. The firm expects rising regulatory risks in the sin sectors given the government's push for a pro-health tax on brewers and its support for a potential tax hike on cigarettes. To reflect this risk, the firm has adopted a more conservative valuation approach for Carlsberg. It pegged the brewer's price-to-earnings ratio at 0.5 standard deviation below its five-year historical average, resulting in a lower target price based on a multiple of 20 times its mid-FY26 forecast earnings. HLIB kept its "Buy" call on Carlsberg with a target price of RM24.14, down from RM31.08 previously. However, HLIB continues to favour Carlsberg for its undemanding valuation and its more diversified sales channels, which provide a natural hedge against exchange rate fluctuations and lower exposure to regulatory risks. The firm also expects the company's beer price hikes to have minimal impact on demand, with any slight volume declines likely offset by higher selling prices and potential margin gains from a stronger ringgit. "Looking at the past two rounds of price hikes in August 2023 and April 2024, the financial impact on brewers has been more neutral than negative, with both recording flat or slight increases in bottom-line performances despite lower sales volumes. "This resilience is largely driven by the inelastic demand for beer. As such, we do not expect a significant drop in performance post-hike. "Additionally, brewers may benefit from margin improvements supported by the strengthening ringgit against the US dollar," the firm added. On Carlsberg's recent earnings results, HLIB said the company's core profit after tax and minority interests (PATAMI) was RM174 million for the first half of 2025, representing a 2.0 per cent increase from last year. This result was broadly in line with expectations, achieving 48 per cent of the firm's full-year forecast and 47 per cent of consensus estimates. "The group's performance was weighed down by softer sales in Singapore, attributed to weak consumer sentiment and heightened pricing competition from other brewers. "Separately, management announced a single-digit price increase for its Malaysia products to support sustainable margins, amid a volatile operating environment," HLIB said.
Malay Mail
17 hours ago
- Malay Mail
From bar stools to sofas: Carlsberg Malaysia spots country's pandemic drinking revolution, sets sights beyond beer
KUALA LUMPUR, Aug 13 — More Malaysians now prefer drinking at home over bars or restaurants, marking a lasting shift in local drinking habits. Carlsberg Brewery Malaysia Bhd attributes this change to the impact of the Covid-19 pandemic, according to a report published in The Edge. The brewer's managing director Stefano Clini said this shift began during pandemic lockdowns when on-premise outlets closed, and has stuck around even after restrictions eased. 'Before Covid, on-trade accounted for more than half of our business. Now, off-trade is half or more than half. That change appears to be permanent,' Clini told reporters on Tuesday. He added that this trend aligned with global patterns, where retail sales for home consumption — known as off-trade — often dominate beer sales. In Europe, off-trade can represent 70 to 80 per cent of total sales. Weaker consumer confidence over the last 18 months has also hit on-trade sales, he said. 'When people go out, they go out less and maybe drink less. Consumers make trade-offs — choosing, for example, between a coffee or a beer at a café.' Touching on demographics, Clini said Carlsberg's data showed those aged 24 to 35 still drink beer, but a drink a little less of it. Consumption tended to rise with age, consistent with past trends. 'Every generation is a bit different, but we haven't seen a massive drop in beer penetration in Malaysia,' he said. To keep up with evolving tastes, Clini said the company is steadily branching out into other beverages but stressed that beer remains Carlsberg's core. The wider Carlsberg Group's moves into the soft drinks sector globally highlight its ambition to be a 'total beverage company.' 'The core of beer and brewing will never change, but we're complementing it. We'll be where the consumer is,' he said. Diversification is quicker in Europe due to sharper beer consumption declines, but Malaysia's pace depends on local market dynamics. Earlier this year, Carlsberg Group completed its £3.3 billion (RM19.9 billion) acquisition of Britvic plc, a leading soft drinks company in the UK. The merger formed Carlsberg Britvic, combining Carlsberg's brewing strength with Britvic's bottling rights for Pepsi, 7UP, and Lipton Ice Tea in Britain and Ireland. Clini said that for now, Carlsberg Malaysia aims to strengthen its portfolio, stay relevant across age groups, and adapt swiftly to shifts in how and where people drink.
Malay Mail
17 hours ago
- Malay Mail
Carlsberg Malaysia to raise beer prices in September to protect margins amid flat sales
KUALA LUMPUR, Aug 13 — Carlsberg Brewery Malaysia Bhd plans a modest price increase on beer starting September 1, 2025 in a move it said was aimed at protecting profit margins amid rising costs and weak demand, as sales volume is expected to remain flat this year. The price adjustment will only apply to the Malaysian market, according to a report published in The Edge. The company's managing director Stefano Clini said the increase would be in the single digits and noted the announcement was unusual, as the company rarely discloses pricing details publicly. 'Our objective is to protect our margin. We're not aiming to expand them, but we are committed to ensuring they're not eroded,' Clini said during a media briefing. He pointed out that the absence of early stockpiling ahead of Chinese New Year and weaker festive demand could put a dent in annual sales volume by 3 to 4 per cent. The prike hike may lead to a short-term drop in consumption lasting two to three months, Clini warned, but it is too early to assess the long-term impact. Despite investing hundreds of millions in infrastructure upgrades, the company has managed to keep production costs stable, a rare achievement according to Clini. 'That's more than what most companies would achieve — typically, you'd expect costs to rise after such investment,' he said. He said that weak consumer sentiment, inflation, and global uncertainties continue to weigh on spending. Meanwhile in Singapore, Carlsberg faces intense price competition, described by Clini as 'value-destructive.' He said the company had to respond to maintain market share but does not expect growth there this year. A recovery is hoped for in 2026 if market conditions stabilise. Carlsberg Malaysia's corporate affairs director Pearl Lai addressed potential 'pro-health' taxes under Malaysia's 13th Plan, which could target alcohol, tobacco, and vaping products, and warned that higher taxes might drive consumers toward illegal products, which do not generate tax revenue. Lai said that Malaysia already has some of the world's highest alcohol taxes, with the last increase in 2016. The company is engaging regulators to advocate for stable tax policies. Shares in Carlsberg Malaysia closed two sen higher at RM17.28 on Tuesday, valuing the group at RM5.28 billion. The stock has fallen 16.4 per cent year-to-date.
