KUALA LUMPUR: Carlsberg Brewery Malaysia Bhd , which posted a 7.9% increase in net profit for the financial year ended Dec 31, 2017 (FY17), expects premium brands to sustain growth this year.
Managing director Lars Lehmann said that beer sales would also increase from the 2018 World Cup event to be held in Russia.
“The World Cup, which is set to take place from mid-June to mid-July, is a fantastic occasion for us. It is going to be a great beer event,” he told reporters and analysts at a briefing on the group’s results here yesterday.
The opening game will kick off in Moscow on June 14.
“The timing of the games is also good for us in Singapore and Malaysia. It is a perfect time to have a beer before the match and people can have it after the match as well,” he said.
The company saw a year-on-year growth in net profit of 7.9% to RM221.2mil for FY17, while revenue grew by 5.3% to RM1.77bil.
“We are committed to continue growing our organic operating profit. And at the same time also to keep giving back cash to our shareholders. We believe we have a solid growth model and we have always had to fine-tune that,” Lehmann said.
The company has also benefited from the continued clampdown on contraband beer.
“I would say that in Peninsular Malaysia, it used to be 10%-15% of the total market (that was contraband) but that’s probably down to about 5% now,” Lehmann said.
The situation, he said, is worse in Sabah and Sarawak, with more than 80% of the market flooded by contraband beer.
He said that it was difficult for the authorities to clamp down on contraband in Sabah and Sarawak, but that figure had been brought down from 90%-95% to about 80%-85%. “It is still a big part of the market there, but I hope the authorities keep clamping down on this. Total industry volume for legitimate beer can grow if the Government continues this clampdown,” Lehmann said.
On its strategy for further growth, Lehmann said that the company would seek out more new revenue streams in a bid to grow its premium brand portfolio while also growing its mainstream offerings.
“We have only launched one new brand, but we have launched innovations on existing brands and are looking at launching around 12-15 this year,” he said
The introduction of more premium brands had helped it boost its financial performance in FY17.
Meanwhile, the company has also announced a dividend policy where it targets a 100% payout of its consolidated net profit subject to business prospects, capital requirements, expansion strategy and other factors considered relevant by the board.
“It is our intention to declare interim dividends on a quarterly basis, where the target payout is at least 75% of our quarterly consolidated net profit, with the remaining dividend being declared in the last quarter. The board may also consider a special dividend in the event of surplus cash after considering the future cash requirements of the group,” Lehmann said.