Latest news with #RM122.2mil
The Star
07-05-2025
- Business
- The Star
Heineken Malaysia growth trajectory intact
Maybank IB anticipates stable sequential earnings for 2Q25 and 3Q25. PETALING JAYA: Heineken Malaysia Bhd is poised for steady growth in 2025, backed by resilient local demand, rising tourist arrivals and macro tailwinds such as the stronger ringgit and minimum wage hike. Analysts believe these trends could support the brewery's earnings despite lingering global uncertainties. For the first quarter ended March 31, 2025 (1Q25), Heineken's revenue fell 3% year-on-year (y-o-y) to RM763.63mil, due to some festive sales being captured in the previous quarter following an earlier Lunar New Year. Even so, core net profit slipped marginally to RM122.2mil, as improved operational efficiency helped expand net margin by 0.5 percentage points leading to flat y-o-y earnings growth. The results were in line with analyst expectations, making up about 25% of full-year consensus estimates. Looking ahead, analysts are optimistic about Heineken's prospects, with expectations for steady earnings growth. Maybank Investment Bank Research (Maybank IB) noted that Heineken's beer volume year-to-date has declined by a mid-single-digit percentage y-o-y. However, the research house anticipates stable sequential earnings for 2Q25 and 3Q25, with a potential pickup in 4Q25 during the year-end festive season. 'Elevated input cost pressures remain a challenge but Heineken will continue to leverage on its internal cost management exercises and supply chain efficiencies to buffer its negative impact to group margins,' it noted. 'The recent appreciation of the ringgit versus the US dollar should also provide some cost savings in the near term,' Maybank IB noted. Against this backdrop, TA Research projects Heineken's profit after tax margin to remain stable at 16.8% in its financial year ending Dec 31, 2025 (FY25) compared to 16.7% in FY24. On a more positive note, the research house observed a 'sharp rise of 31.3% y-o-y in tourist arrivals to 6.7 million in the first two months of 2025,' driven by stronger inflows from Singapore, China, Indonesia and Brunei. 'Should this momentum persist, we expect beer consumption to remain robust in FY25, supported by the continued recovery in tourism activity,' it said. Meanwhile, UOB Kay Hian Research expects domestic beer demand to be resilient in 2025, despite the drop in sales during 1Q25. 'The raise in the minimum wage to RM1,700 in February 2025 could boost beer consumption of its more affordable brands (Tiger) going forward, while the recent strengthening of the ringgit could also see costs come off further, although the impact may be delayed into second half of 2025 (2H25),' it said. 'Heineken was already expected to benefit from the ringgit strengthening in 2H24 with costs expected to slowly average downwards and, should the ringgit's appreciation persist, we believe there may be further upside to margins in the medium-to-long term.' On the US tariff threat, it noted that the immediate impact is expected to be largely non-material. RHB Research, on the other hand, anticipates 'respectable' earnings growth for Heineken in 2Q25, which is expected to benefit from a low base in 2Q24. It said that 'positive traction from tourist arrivals and the rise in disposable income should provide further support' for its steady performance.
The Star
06-05-2025
- Business
- The Star
Heineken Malaysia maintains stable profits in 1Q25
Heineken Malaysia managing director Martijn van Keulen. PETALING JAYA: Heineken Malaysia Bhd expects consumer sentiment to be impacted by inflationary pressures and ongoing global economic uncertainties. These uncertainties are driven by the newly introduced US tariffs and escalating US–China trade tensions, which may affect consumer confidence and spending behaviour. For the first quarter ended March 31, 2025 (1Q25), the brewery's net profit was marginally lower by 0.3% year-on-year (y-o-y) to RM122.2mil or earnings per share of 40.44 sen. Revenue in 1Q25 was down by 3% y-o-y to RM763.6mil, primarily influenced by the timing of Chinese New Year (CNY). The company said this year's festive period fell in January, resulting in an earlier sell-in activity that took place in 4Q24. In comparison, CNY in 2024 took place in February, driving a more concentrated sales period within 1Q24 as sales momentum spanned both January and February; while the festive boost in 1Q25 tapered off after January. The company added despite the low single-digit revenue decline, its profits remained stable and resilient, delivering a flat year-on-year performance in 1Q25. Particularly, effective cost management and improved financial efficiency, as reflected in lower interest expenses during the quarter improved its operating leverage. Heineken Malaysia managing director Martijn van Keulen said the group will continue to navigate the dynamic landscape with agility, driving topline growth through targeted commercial initiatives while maintaining disciplined cost control and operational efficiency to sustain healthy margins. 'We will continue to future-proof the business, as we execute our EverGreen strategy in navigating the evolving external environment. 'This strategy is anchored on driving superior growth with a cost-conscious mindset, catering to evolving consumer preferences, embedding sustainability into our operations, investing in becoming the best-connected brewer, and most importantly, unlocking the potential of our people,' he said. Further, the group said it appreciates the government's decision to maintain excise duties on beers in Budget 2025, as any hike in excise rates will drive greater demand for illicit alcohol. 'The group remains committed to supporting the government in mitigating illicit trade through holistic efforts, including enforcement collaboration and raising greater awareness in the market,' it said.
