Heineken’s bottom line 30% up
Revenue growth and better cost efficiency boost Q3 result
PETALING JAYA: Heineken Malaysia Bhd’s net profit for its third quarter ended Sept 30 rose more than 30% to Rm103.30mil from Rm78.87mil in the previous corresponding period, on the back of revenue growth and improved cost efficiency, as well as the timing of commercial spend for new product launches executed during the quarter.
In a filing with Bursa Malaysia, the company said revenue in the quarter increased to Rm602.53mil from Rm512.01mil a year earlier, mainly driven by an improved sales performance across all core brands and new product launches.
“Excluding the sales and service tax impact, group revenue grew 11%. Revenue growth for the quarter was driven by an improved sales performance across all core brands and new product launches,” it said.
For the nine-month period, Heineken’s net profit grew to Rm221.80mil from Rm182.52mil in the previous corresponding period, while revenue grew to Rm1.64bil from Rm1.37bil a year earlier.
In a statement, Heineken managing director Roland Bala said the company’s commendable performance in the third quarter reflected its strong execution of commercial priorities and operational efficiencies in a challenging environment.
“During the quarter, we were pleased to launch exciting innovations providing our consumers with exceptional experiences with our world-class brand campaigns and activations. A key milestone in the quarter was the launch of the non-alcoholic Heineken 0.0 and the ultra-refreshing Tiger Crystal.”
Bala added that it was also an eventful quarter for the company at the Putra Brand Awards 2019, with its flagship brand Heineken winning a Platinum award, whilst Tiger Beer and Guinness brought home Gold.
“The company’s brand successes this year demonstrate once again that our world-class brands are recognised by Malaysian consumers as amongst the best brands in the country. Since 2010, Heineken has won a total of 30 awards at the Putra Brand Awards.”
He noted Heineken’s performance over the past nine months had been good.
“We are also proud to have recently launched our e-commerce platform, Drinkies.my, which allows consumers to bring the bar experience home by providing a solution to the number one pain point of home consumption, which is carrying heavy beverages home.”
On its outlook going forward, Bala said the company remains cautious on the outlook, given the softening economic environment, competitive market conditions and the continued threat from the illicit trade (duty not paid).
“The fourth quarter is traditionally the peak selling period and the group will continue to focus on sharpening its commercial execution in preparation for an earlier 2020 Chinese New Year festive sellin and improving operational efficiency across the business.
“Revenue for the final quarter is expected to be strong. However, the intensified commercial activations planned for the fourth quarter will impact on profitability for the quarter. Overall, the group is confident of delivering a satisfactory performance for the full year.”
Bala also commended the government for its ongoing efforts in addressing illicit alcohol activities, which have contributed to a significant reduction in the illicit trade; as well as its move not to increase excise duties on beer and stout, which are already the second highest in the world.
“The group will continue to support the government’s move against illicit alcohol and drive awareness through proactive engagements with relevant stakeholders, including consumers,” he said.
Heineken closed 30 sen down to RM25.90 yesterday.