PETALING JAYA: Heineken Malaysia Bhd has reported a satisfactory performance for its first quarter ended March 31, 2017 despite challenging market conditions compounded by economic pressures.
The group reported a marginally lower net profit of RM48.97mil for the quarter compared to RM50mil during the previous year’s corresponding period. Its revenue base declined by 12.5% to RM401.11mil from RM458mil a year ago, as Heineken’s business was impacted by soft consumer sentiment.
Additionally, the decline was also due to the year-end festive season and the earlier sell-in for the 2017 Chinese New Year, which mainly took place in the quarter ended Dec 31, 2016.
Despite the lower figures, Heineken will continue to focus on prioritising strategic investment in commercial spend to maximize returns, the group said in a statement.
Additionally, it will also see increased cost efficiencies across the supply chain from global procurement and other cost-saving initiatives to partially offset the impact of lower revenue, it added.
“Global economic uncertainties combined with currency volatility continue to exert pressure on the market, adversely impacting consumer sentiment. Heineken’s commendable results are due to improved operating efficiencies leveraging on its global best practices to deliver sustainable value,” said the group’s managing director Hans Essaadi.
According to Heineken, local consumers have been negatively impacted by global factors, including increasing protectionist sentiment in developed economies, Brexit and the economic slowdown of the nation’s major trade partners, including China and Japan. These factors have held back the national economy’s growth and increased consumers’ focus on value, it said.
“To address changing consumer demand, Heineken is focused on investing in innovation to continue delivering the highest quality products to meet changing consumer preferences. With an iconic portfolio of brands and access to the best practices and expertise of the world’s most international brewer, we are confident that Heineken will continue to lead the market,” he said.
On the issue of contraband, Essaadi said that it remains a major concern for the industry outside of the general economic considerations.
“Contraband products continue to enter the country representing a significant revenue loss to both the industry and the Government as a whole. We commend the Royal Malaysian Customs Department for their efforts in addressing this issue, particularly in Sabah and Sarawak,” he said.
Noting that the issue was a real threat to the economic growth of the country, Essaadi added that Heineken fully supported all Government initiatives to curb the influx of contraband products.