Heineken Malaysia pre-tax profit up 2% in second quarter

PETALING JAYA: Heineken Malaysia Bhd’s pre-tax profit for the second quarter ended June 30, 2017 rose 2% to RM80.93 million from RM79.62 million a year ago due to the group’s cost management initiatives.

In a filing with Bursa Malaysia yesterday, the group said its effective cost management was derived from the implementation of a procurement process that synergises with the Heineken Global Procurement systems and increased productivity as a result of automation in route to market.

Revenue for the quarter fell 12% to RM406.58 million from RM459.51 million a year ago due to higher sales made in anticipation of price increase implemented on July 1, 2016 while the soft market sentiment continued to weigh down the group’s sales performance.

“This was buffered by revenue growth for premium brands driven by commendable performance in Strongbow Apple Ciders and the launch of Guinness Bright in May 2017,” it said.

The board has declared a single tier interim dividend of 40 sen for the financial year ending Dec 31, 2017, payable on Oct 9, 2017.

Heineken Malaysia managing director Hans Essaadi said the group expects the market outlook to remain challenging due to cautious consumer spending amidst worries of rising cost of living and economic uncertainties, and the continued threat from contraband in the Malaysian market.

However, it will continue to leverage on its portfolio of iconic brands as well as the robust execution of commercial strategies and strive to deliver stronger performance for the remaining period of the year.

For the six months ended June 30, 2017, pre-tax profit fell 3% to RM145.42 million from RM149.82 million a year ago due to lower revenue but mitigated by effective cost management.

Revenue for the period fell 12% to RM807.69 million from RM918.43 million a year ago due to higher sales made in anticipation of price increase implemented on July 1, 2016 and an earlier Chinese New Year in 2017, which resulted in higher deliveries at end-2016.

Its share price fell 0.23% to close at RM17.64 yesterday with a total of 57,800 shares traded, giving it a market capitalisation of RM5.33 billion.