ALTHOUGH the general operating environment for Carlsberg Brewery Malaysia Bhd has been rather challenging, the brewer has managed to maintain its position as a healthy dividend paymaster.
Carlsberg recently declared a final gross dividend of 15 sen per share and a special tax exempt dividend of 50 sen per share which bring total gross dividend payout for financial year (FY) 2002 to 94.4 sen per share or a yield of 9.4 per cent at current share price. This works out to a payout ratio of 102.6 per cent.
The news brought about much cheer. Carlsberg share price gained 4 per cent to RM10.40 on the back of the good news. It closed Thursday at RM10.40.
Carlsbergs strong cash position and minimal capital expenditure enable the company to maintain strong dividend yields and this trend, say most analysts, is likely to continue going forward.
OSK Research has projected a gross dividend payout of 95 sen in FY2003 and 100 sen in FY2004, which represent payout ratios of 102 per cent and 95.5 per cent respectively.
Online investment advisory Surf88.com attributes Carlsberg's ability to pay above market dividends to its RM263 million cash reserves.
Still, prospects for beer demand remain weak given the cautious consumer sentiment in the current climate coupled with competition from substitute beverages. The on-going price war between the duopolies (Carlsberg and Guinness Anchor Bhd) is also unlikely to recede, as both jostle for market share in a tough environment.
The reported ban on offensive poster advertisements and the display of unapproved signboards in family-oriented eateries, however, is unlikely to hurt overall sales. The Green Label, which is the top selling brand of Carlsberg, already has huge brand equity.
For the financial year ended Dec 31, 2002, Carlsberg registered a revenue of RM838.78 million down from RM841.11 million in the previous year. Net profit fell to RM101.85 million from RM125.97 million. The lower net profit was mainly attributed to the hefty costs involved in the launch of Chang beer.
Its low margin contribution further aggravated Carlsberg's bottom line as it was priced about 10 per cent cheaper than the Green Label, says an analyst from OSK Research.
The launch of Chang beer was viewed as part of Carlsberg's tactic to beat Guinness' market share in the value segment as well as to counter less expensive imports.
For Carlsberg's financial year ending in Dec 2003, Multex Global Estimates has a net profit forecast of RM115.45 million and earnings per share of 76 sen.
Did you find this article insightful?