Growth momentum to continue for Carlsberg


A bartender serves a glass of Carlsberg beer at a bar in Kuala Lumpur, Malaysia in this July 4, 2012 file photo. - REUTERS

PETALING JAYA: Carlsberg Brewery Malaysia Bhd is expected to continue its growth momentum, albeit at a normalised pace for the current financial year ended Dec 31, 2019 after it delivered a higher-than-expected set of results for financial year 2018, say analysts.

The growth will be led by the group’s Singapore operations and stronger sales volume from the premium brand segment.

CGS-CIMB, in a recent report, expects Carlberg’s Singapore operations to improve following better inventory management and the restructuring of its operations undertaken since the second half of 2018.

“We also expect Carlsberg Malaysia to continue to record stronger sales volume, especially in the premium segment (Asahi, 1664 Blanc, etc) which offer better margins as compared with the mainstream beers, Carlsberg Green Label and Carlsberg Smooth Draught.

“This is in line with the group’s ongoing strategy of premiumisation,” the research unit added.

In addressing the higher production costs in tandem with the recent increase in raw material prices between 5% and 10% year-on-year, Carlsberg Malaysia has also forward hedged the bulk of its necessary raw material requirements, and is confident of mitigating cost pressures with ongoing cost efficiency efforts.

UOB Kay Hian estimated that Carlsberg Malaysia would need to to raise its average selling prices (ASPs) by 1.2% to 2.5% to fully pass on the higher costs. “This is highly manageable, as Carlsberg Malaysia had maneuvered a larger ASP hike in 2018 to great success.”

 

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