Carlsberg focuses on cost optimisation initiatives

PETALING JAYA: Carlsberg Brewery Malaysia Bhd has activated a business continuity plan, which calls for additional cost optimisation initiatives, to mitigate earnings impact of lost volume during the movement control order (MCO) period.

Group managing director Stefano Clini acknowledged the immediate effects of the MCO had been keenly felt by the company’s distributors, customers and consumers, with both stock scarcity and dampened consumer sentiment expected to impact overall sales.

“While we cannot predict the impact of the current pandemic given the uncertainties, our priority in the coming months is to get operations and distribution back up to speed, although we acknowledge that it will take time,” Clini said in Carlsberg’s 2019 annual report.

The first phase of MCO, launched to contain the spread of Covid-19 in Malaysia, started on a two-week basis from March 18. It had since been extended by four times, each new phase on a two-week basis.

Relaxation of MCO rules began at the start of the third phase on April 15, with certain industries allowed to operate, and by May 4, during the fourth phase of the exercise, almost all sectors were allowed to operate.

“Moving forward, we recognise the unavoidable shifts in consumer behaviour as the world faces a new reality created by COVID-19.

“We will need to be agile in adapting to new demand spaces, sales channels, marketing activities, and consumption patterns, while staying true to our focuses on quality, innovation and efficiency as part of the SAIL’22 strategy,” Clini said.

The SAIL’22 strategy is the Carlsberg global group’s transformation plan to strengthen its core business and position the group for growth.

Carlsberg registered a net profit growth of 5% year-on-year to Rm291.02mil for the financial year ended Dec 31, 2019, driven by higher sales from Malaysia and Singapore operations.

This was also backed by the successful relaunch of Carlsberg Danish Pilsner, premiumisation and innovation, as well as the Rm16.3mil share of profits from Lion Brewery (Ceylon) PLC.